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Autumn 2017

IBIA looks ahead Singapore Convention set to address the big issues

inside this issue: What happens in 2020? Bio-fuels - a long term solution? Do we still need bunker surveyors?

THE ONLY OFFICIAL MAGAZINE OF


editor’s letter

Hectic times To say that there is a lot going on in the global business right now is a massive understatement. Every issue of World Bunkering seems to cover more urgent political and commercial issues while the old adage that necessity is the mother of invention certainly seems apt when it comes to our industry. Over the 12 years that I have edited World Bunkering I can’t remember so many possible items for our Innovation pages. I hope those that we have featured are particularly relevant. One new product is especially exciting, and also troubling. Small US-based technology company Green Framework has developed a machine, named the De-Sul, which it says turns high sulphur heavy fuel oil into a product complying with the upcoming 0.50% sulphur limit. The equipment is fitted on board the vessel. A silver bullet? Well it sounds a bit like the solution the industry has been waiting for. If so, scrubber manufacturers might be concerned. This is certainly one to watch. The need to comply with the sulphur limits coming into force in 2020 is rightly preoccupying the industry at present. This concern is reflected in most, if not all, of our pages in this issue which comes out in time for IBIA’s Annual Convention in Singapore in November. I hope that the in-depth analysis by Unni Einemo of the main regulatory issues will help inform discussion at Singapore. Unni has spent long hours at IMO following all the twists and turns on various important issues facing the industry. Right now we are looking apprehensively at 2020 but Unni also reports on the even more significant long term issue of greenhouse gas reduction.

On the topic of saving the planet Unni has also taken an in-depth look at bio-fuels. They certainly won’t provide that silver bullet, at least not in the short medium term, and there are many pitfalls when it comes to switching to this, potentially ‘greener’ source of energy. As Unni points out ‘bio’ does not necessarily mean ‘green’ in the environmentally friendly sense. Nevertheless, in the long term, it would be surprising if bio-fuels do not form a major part of the solution to shipping’s fuel dilemma. Regulatory pressure on the industry combines with commercial ones. As our feature on the Independents makes clear, the structure of the global bunker market has changed, and will change further. While the disastrous collapse of OW Bunker is now three years astern its effects are most definitively still with us. As the feature makes clear the failure of such a massive player has led to rethinking in boardrooms of players in all segments of the bunker markets. Perhaps one of the most interesting developments is the oil majors’ newly increased appetite to get involved again in the nuts and bolts of bunkering. That has got to be significant since it was their withdrawal that kick started the bunker supply industry as we know it now. Our geographical features cover the Middle East and South-East Asia. These very different regions have unique characteristics but, again, the bunker industries in both are focused very much on what happens in 2020.

The only official magazine of IBIA, World Bunkering autumn 2017

In both regions LNG is being developed but the reality is that distillate or very low sulphur fuel oil is going to be needed in huge quantities. This issue will also be available during London International Shipping Week (LISW) when IBIA is organising a forum on, guess what?, “How will the IMO regulate the 2020 Global Sulphur Cap?” We will be there of course but will also be keeping an eye on the many other events taking place during LISW which cover topics of concern to our industry. And then of course there is the Convention in November. The World Bunkering team look forward to seeing you there.

David Hughes Editor 3


7

29-31

52-53

Chairman’s Letter Widening membership and collaboration are essential to enable IBIA to work for you

Industry News BV’s new energy storage rules

Fuel Quantity The rise of the machines?

32-33

54-55

Bio Fuels Beyond fame – the future is... waste?

Independents Tough times for independents

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56-58

Lubricants A busy scene

Equipment and Services MRV looms large

35-38

59

Middle East All eyes on the future

Legal Fraud case duo jailed

39-40

60

South East Asia Interesting times

LNG SEA\LNG sees 2020 opportunity

41-44

61-65

9 Chief Executive’s Report A balanced perspective

10-11 IBIA Asia ibia Asia report: April to July 2017

12-13 IBIA Africa A regional update

14-15 IBIA Events The Main Events and New Members

16-17 Interview Justin Murphy talks to World Bunkering about his first few months as CEO of IBIA

18-28 Event Reviews IBC, Istanbul Conference Platts European Bunker Conference Nor-Shipping Publisher & Designer: Constructive Media ibia@constructivemedia.co.uk Editor: David Hughes anderimar.news@googlemail.com Deputy Editor: Unni Einemo unni@ibia.net Project Manager: Alex Corboude alex@worldbunkering.net On behalf of: IBIA Ltd 4th Floor 50 Liverpool Street London EC2M 4PR, UK Tel: +44 (0) 20 3397 3850 Fax: +44 (0) 20 3397 3865 Email: ibia@ibia.net Website: www.ibia.net

IMO MEPC 71 sets the scene for implementation of 2020 sulphur limit

Company News

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45-47

Next Issue

Innovation Wind and solar sail combination progresses

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48-51

Diary

Russia News from Russia 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 Constructive Media on behalf of IBIA and is supplied to members as part of their annual membership package.

Constructive Media 50 George Street, Pontypool NP4 6BY Tel: 01495 740050 Email: ibia@constructivemedia.co.uk www.worldbunkering.com


bunkers@oil-atlantic.energy

BUNKERING BY TRUCK OR BY BARGE IN ALL FRENCH PORTS

A team where every member is committed to creating with you the best opportunity of supply, to anticipate and understand your needs. That’s why the human factor and the quality of our sales relationships are so important to us. Office Address 83, boulevard Berthier 75 017 PARIS - France +33 (0)1 42 56 13 77


Widening membership and collaboration are essential to enable IBIA to work for you

I

BIA has members in around 80 countries. To be able to continue to increase our influence globally, improve the service to each of our members and progress, IBIA needs two things: more members and funding. With a high proportion of our membership currently residing in Europe and Asia, new members from other regions would be particularly welcome. As for funding, some of this is being generated through IBIA’s two key annual events; the dinner in London during International Petroleum week in February, and the annual convention, to be held this year in Singapore in the second week of November. Other sources of funds are membership subscriptions and revenue from teaching courses, most of which have been held in Singapore over the past year or two, but also in many other locations in response to demand. On the events front there are plans in hand to hold seminars in Tenerife and Jamaica. We need constructive suggestions from members and cooperative partners to suggest where we should hold additional meetings to meet specific or more general needs. These can cover a single issue such the implications of 2020 or introducing mass flow metering, or be more general in nature, such as IBIA’s one day introduction to bunkering or the more advanced courses. The Association has access to a very wide range of knowledge and talent that can be working for you. IBIA has excellent insight into the workings of IMO with respect to bunkering issues due to the very professional efforts of Unni Einemo who is a full time staff member in the IBIA London office. Through meetings with the major ports, as part of our Port Charter initiative we have access to in-depth knowledge of bunker procedures and processes in these ports which can also be passed on to others. We also have a mediation service, giving access to several of the leading legal minds in the area of bunker disputes,

which is available to the membership at very attractive rates. Our links with other organisations such as the Society for Gas as a Marine Fuel (SGMF), with whom IBIA shares office facilities in London, provides great insight into where LNG as bunkers will develop both technically and commercially. Under our new CEO, Justin Murphy, IBIA has widened its inter-industry collaboration. In addition to our links with IMO, SGMF and key ports we are also collaborating with entities such as the Institute of Bunker Buyers and Consumers; MPA; INTERTANKO; BIMCO; the Turkish Bunker Association; London International Shipping Week; Maritime Anti-Corruption Network; SPRING Singapore (an agency within the Ministry of Trade and Industry); Oil Companies International Marine Forum; IPIECA; Nanyang Technological University in Singapore as well as the Methanol Institute. IBIA can call on this talent to provide seminars anywhere to help inform and educate. IBIA’s knowledgebase is available to members not only through seminars but through member newsletters and updates, this magazine, and through direct correspondence with the secretariat. Eventually much of this knowledge will become directly available via the members’ only section of the website (www.ibia.net). Our sector has been relatively slow in making better use of software and the increasing volume of data available to assist buyers in selecting the best location and timing to purchase bunkers, as well as to negotiate the price and terms. Many purchasers are not achieving the lowest costs, and we note here that the lowest price per tonne of fuel does not necessarily equate to the lowest costs for the operator. Bunker buying habits could be improved as there is often a lack of comprehensive management of what is, for most owners and operators, their largest operating expense.

The only official magazine of IBIA, World Bunkering autumn 2017

Big data and digitisation appear ever more often in the industry press. Many wonder if they should do something about it while others, perhaps hope it is a fad that will go away. It will not. This is one of the many areas where IBIA is looking into ways to provide support to its membership. One avenue is to pool our collective knowledge and share it to the benefit of all members. IBIA’s Working Groups benefit from the input of knowledgeable participants and one purpose of this letter is to elicit the help of those providing bunker industry software and systems as well as industry participants who are already benefiting from these systems. As reported in a recent marine industry survey, over half those interviewed understood that there is greater need for transparency and coordination between participants in the shipping sector, including the bunker supply chain. As people involved in bunkering seek to gain efficiency and reduce costs, the need for better systems and access to detailed information increases. It is hoped that this innovative approach together with training will add further to the value provided by IBIA to its membership.

Robin Meech Chairman 7

chairman’s letter

WORKING TOGETHER


In the six months since I became CEO at IBIA what I’ve found most striking is the goodwill that people feel towards IBIA - it’s tangible and it’s uplifting

That’s not to say that people feel that we’re perfect. I’ve received a great deal of advice from members as to where IBIA should improve and also suggestions as to new services that we should be providing. The important point is that the bunker industry feels connected to us. People want IBIA to succeed! For those of us on the IBIA board, or in regional committees or members of the secretariat, this acts as both a motivating factor and also as a reminder of the duty that we have to serve the needs of our members.

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he global shipping industry that we serve and our own bunker industry are both facing a considerable amount of pressure. Economic pressure: in the form of tonnage over-supply, low freight markets and compressed margins; and pressure brought about through the introduction of new legislation with significant cost implications for many. In spite of this, or maybe because of it, people want us to succeed and recognise that an independent, credible global voice for the industry will be for the benefit of all.

The 71st session of the IMO’s MEPC held in early July was an enlightening experience for me and served as another example of the power of cooperation and what can be achieved by taking a long term, strategic view. IBIA’s primary focus within the IMO is managing the best interests of our entire industry. However, this is best achieved by demonstrating that not only are we the voice of our industry but also by our willingness to listen, to engage others in debate and, where appropriate, to cooperate with them in co-sponsoring documents and sharing insights on key industry issues. It is a unique forum and somewhere that IBIA can deliver long term value to its members. A key strength of IBIA is our truly global representation and the broad scope of our membership across the entire bunker industry value chain. The unprecedented change heading our way on 1 January 2020 has caused a great deal of debate regarding the industry’s readiness. The global sulphur cap reduction will affect all of us. The particular issues that our industry’s wide range of stakeholders face will vary according to their geographical location, their scale,

their business model and a host of other factors. IBIA will endeavour to provide both general industry-wide updates and also address the very specific needs of individual and corporate members via a new online initiative. In essence, the IBIA 2020 Portal will offer members and other industry stake-holders access to the industry’s leading experts and to a wide range of other resources. In July I gave a presentation in Singapore at IBC’s Bunkering Week which looked at the future of bunkering in 2030 and beyond. This inevitably caused me to reflect on where we are today and the progress that we’ve made in the past 20 years or so. Today we are besieged with 24 hour news, both at home and while at work. In competing for our attention, the media often tends towards the sensational and the negative. It’s easy to understand why some may perceive that a general sense of decline and worsening pervades whereas a more balanced perspective would also highlight the dramatic progress that has taken place in society. It’s a fact that poverty has declined more in the past 50 years than it did in the preceding 500 years. Moreover, the last 25 years has witnessed a dramatic reduction in the rate of global hunger, illiteracy, infant mortality and pollution – however, these facts don’t lend themselves to dramatic headlines. In the bunker industry we have our own untold story. Our industry has been a key contributor to the development of global trade; has contributed over many years to the significant increase in prosperity in many economies across the globe; and our industry is a significant charitable benefactor. This should be a source of great pride yet there is a sense of reticence in the industry around making such claims.

The only official magazine of IBIA, World Bunkering autumn 2017

This may be due to the fact that we acknowledge that we can do better, which is undoubtedly true of every industry, but may also be down to the fact that we see ourselves in an ancillary capacity - as serving others. Serving our business partners and serving society in general should be a source of great pride. We recognise that to effectively navigate the changing landscape over the next few years that we will have to continuously adapt to our new environment. At IBIA we’re ready to seize this opportunity for the benefit of us all and to make your voice heard!

Justin Murphy Email: justin.murphy@ibia.net Tel +44 20 3397 3850

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chief executive’s report

A BALANCED PERSPECTIVE


ibia asia

Capt Segar of MPA (far left) and other guests at the IBIA Asia Gala Dinner

IBIA ASIA REPORT: APRIL TO JULY 2017

The IBIA Asia Secretariat has been busy at several technical committees, hosted a Gala Dinner, taken part in conferences and continued with training courses, Regional Manager Simon Neo reports

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lot has happened since our last report in the Summer 2017 issue of World Bunkering, where we covered the first quarter of the year. IBIA Asia was involved with the launch of the first Singapore Technical Reference (TR) 56 for Liquefied Natural Gas (LNG) Bunkering as we sit in the Technical Committee for LNG Bunkering and also the Working Group on LNG Bunkering Operation Committee. The TR 56 for LNG Bunkering was launched by the Maritime and Port Authority of Singapore (MPA), SPRING Singapore and the Standards Development Organisation on 28 April 2017 in conjunction with Singapore Maritime Week 2017. It is an important step in making Singapore an LNG-bunker ready port. We also had our Gala Dinner in Singapore during the Maritime Week, and were involved either as speakers or panellist at various bunkering conferences held in Singapore from April to July 2017. Besides all this we continue with our training programmes in Singapore and our work within the Technical Committee f or Bunkering and the Working Group for Mass Flow Meters (MFM). IBIA Asia is also involved in the Task Group (TG) that is reviewing the System Integrity and Security and the TG for Meter Selections and installation. The Working Group and TG for MFM are reviewing the TR 48:2015 as part of a process to upgrade the TR 48 to a Singapore Standard or SS.

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IBIA Asia together with the Singapore Shipping Association (SSA) and the SPRING Singapore Technical Committee for Bunkering have also set up an interim committee to look into a solution where the MPA-approved MFMs on bunker tankers are used to give the official measure when bunker tankers are loading at terminal, and we are dialogue with the Singapore Chemical Industry Council about this. IBIA Asia Gala Dinner & Bursary Disbursement IBIA Asia hosted our Annual Gala Dinner on 27 April 2017 at the Shangri La Hotel Ballroom. It was attended by about 200 people, including IBIA’s CEO, Justin Murphy. Capt Segar, Assistant Chief Executive of MPA, attended the dinner as our Guest of Honour.

We also gave out the IBIA Bursary to assist students doing Marine Studies at Nanyang Technology University (NTU). This year we gave a total of S$14,000.00 to this bursary run by NTU. IBIA Asia has been helping maritime students from less privileged backgrounds since 2012. So far, a total of S$87,170.00 has been given out through this bursary to 12 students to enable them to attend NTU. Conference participation IBIA Asia took part as one of the panellists at the annual Argus Asia Refined Products Conference which was held at the Marina Mandarin Singapore Hotel on the 23-24 April 2017. The panel debates we contributed to were on Marine Fuel and LNG as Bunker.

Simon Neo announcing the Bursary Award at the IBIA Asia Gala Dinner

The only official magazine of IBIA, World Bunkering autumn 2017


ibia asia Members of the IBIA Asia ExCo and Capt Segar of MPA at the Gala Dinner

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t the end of June, Simon Neo gave a keynote speech on ‘Challenges of Bunkering in Singapore and the Region’ at the Platts inaugural Bunkering and Storage Asia Conference held at the Novotel Singapore Clarke Quay Hotel. He was also a panellist on a session entitled ‘The Future of Asian Bunkering and Storage’. A month later, IBIA was out in force at the IBC Bunkering in Asia conference which was held on 26-27 July at the Hilton Hotel Singapore. IBIA CEO Justin Murphy was one of the speakers at this conference, with a presentation entitled ‘Bunkering 2030: a glimpse at the future’ where he explored the longer term economics, demographics and technical trends of the bunkering industry.

At the time of writing, IBIA Asia is playing a key part in helping to organise IBIA’s Annual Convention which will take place on 8-9 November, preceded by two days of IBIA training courses. We look forward to welcoming IBIA members from around the word to Singapore! Training The Basic Bunkering Course and the Enhanced Bunkering Course are still being run by IBIA Asia at its premises. Both of these courses today include the mass flow metering course and will certify the cargo officer or bunker surveyor to work on board bunker tankers to conduct bunker delivery using MFMs. This course will give the trainees or officers an overview of how bunker operations on the tanker shall be carried out in accordance to the SS600:2012 and TR 48:2015 for mass flow meter delivery.

Singaporeans and permanent residents that meet specific MPA requirements will get a grant covering 90% of the course fee from the Maritime Cluster Funds, and if they are IBIA members they will get a 25% discount on the training fee. IBIA Asia holds the MFM course twice a month at its office premises. Right now, IBIA Asia is in talks with other authorities within the region to conduct training for the bunkering industry regarding ISO 13739, the ISO standard which specifies procedures and requirements for the transfer of bunkers to ships from bunker tankers, road tankers and shore pipelines. We hope to conduct our first training on this sometime in September.

Some of the IBIA Asia Gala Dinner guests

The only official magazine of IBIA, World Bunkering autumn 2017

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ibia africa

IBIA Africa: A regional update Regional Manager Tahra Sergeant reports on activities in Africa

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n September 2016, Aegean spoke at the IBIA Africa Forum in Cape Town, outlining the company’s plans for Algoa Bay. Being the first ever company to launch offshore bunker supply in South Africa earlier in the year and the first to sell imported products, Aegean’s arrival marked a significant change to the country’s bunkering scene. Since then, Aegean has passed the 700,000-tonne mark for deliveries of fuel oil and marine gasoil to ships. The bunkering operation comprises four fully Aegean-owned ships; a Panamax tanker used as a mother ship to receive and store the imported product and three bunker barges of 6,500 dwt making deliveries to customers. The cost of the operation is about US$75 million (US$40 million assets plus about US$35 million of working capital per year).

Aegean says its South African operation offers a constant, cost-effective and efficient service to ships calling the ports of Algoa Bay and Richards Bay as well as to passing trade. Looking further into the future, three companies, including Wärtsilä, are actively looking at the potential for LNG as a transport fuel both on land and in the marine sector in South Africa.

This could see LNG bunkering facilities built that will cater to ships that have chosen LNG to comply with marine emissions legislation. TNPA (Transnet Ports Authority South Africa) reports that development and planning continues for bulk services for an LNG facility within Richards Bay, however there is no clear indication as to the completion of this facility, with current timelines suggesting it won’t be before 2023.

The total volume represents about 1,200 ship-to-ship deliveries to ships at anchorage. Aegean ensures that environmental aspects are taken into account in establishing, implementing and maintaining its Environmental Management system as well as a risk assessment program and crew training program. Continuous supply of bunker product is secured by their in-house trading, operation and shipping teams, based in different parts of the world.

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The only official magazine of IBIA, World Bunkering autumn 2017


n 1 August 2017, the National Ports Authority submits its tariff application to the Ports Regulator of South Africa for the 2018/19 financial year. IBIA has attended the roadshows and will remain abreast of these developments, submitting comments within the open forum of the Port Liaison Forum. An invitation is hereby extended to port users and interested parties to submit proposals and comments on the tariff application. Copies of the application are on website: www. transnetnationalportsauthority.net or alternatively, the Regulator’s website: www.portsregulator.org. The Ports Regulator is one of the key institutions envisaged by the Commercial Ports Policy, and the National Ports Act (Act 12 of 2005), which creates the National Ports Authority, the Regulator and the Port Consultative Committees as statutory institutions.

ibia africa

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The Ports Regulator is independent in the performance of its mandate from state departments and entities.

2017 African Ports Evolution, 5 – 7th September, Accra Ghana

As the branch expands its reach in Africa, we are pleased to be able to facilitate in-house training, or setting up training courses adjusted to the specific needs of a company or a region upon request. Alongside our Singapore branch and Executive Committee we recognise that each region has unique requirements and we are able to work within the company and/or with ports to develop specific programmes using our existing course as a basis.

African Ports Evolution, 17 – 18th October, Durban South Africa

Looking forward to future events within and around Africa, there have been some changes to dates mentioned in previous issues, and we will now also be offering training at these events:

The only official magazine of IBIA, World Bunkering autumn 2017

Maritime Week Africa , 12 – 15th December, Cape Town South Africa (Training) 2018 IBIA Regional Forum, 20 – 22nd March, Tenerife Canary Islands (Training) Should you require any further information regarding the Africa events, training or sponsorship opportunities contact:

Tahra Sergeant, IBIA Regional Manager Tel: +27 21 412 1593 Email: tahra.sergeant@ibia.net

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2017 SEPTEMBER 5 - 7th 13th 14 - 15th 27 - 28th OCTOBER 11 - 12th 12 - 13th 17 - 18th 25 - 26th NOVEMBER 6th - 10th 15 - 16th 30th - 01 Dec 28 - 29th DECEMBER 12 - 15th 12th 12th

2018 FEBRUARY 19th 19th MARCH

new members

20 - 22nd

African Ports Evolution - West Africa IBIA Regional Forum: LISW IBIA Basic Bunker Course IBIA Enhanced Bunker Course

Accra, Ghana London, UK Singapore Singapore

IBIA Basic Bunker Course ARACON African Ports Evolution IBIA Enhanced Bunker Course

Singapore Rotterdam Durban, South Africa Singapore

IBIA Convention IBIA Basic Bunker Course Platts Meditterranean Bunker Fuel Conference IBIA Enhanced Bunker Course

Singapore Singapore

Maritime Week Africa IBIA Basic Bunkering Course Social Event: Africa Social Event: Singapore, Asia Social Event: London, UK

Cape Town, South Africa Cape Town, South Africa

IBIA AGM and Board Meeting IBIA Annual Gala Dinner

London, UK

IBIA Regional Forum: Caribbean, Jamaica IBIA Regional Forum: Africa

Caribbean, Jamaica Tenerife

Athens, Greece Singapore

Cape Town, South Africa Singapore London, UK

London, UK

Individual

Corporate Supplier (Physical) Ship Owner Linda Ang Millennium Oil PTE Ltd Asia linda@m-oil.com.sg

Trade Association Chris Chatterton Methanol Institute Asia cchatterton@methanol.org

Supplier (Physical) Minas Hatzistamatiou Coral Products & Trading Europe minas.hatzistamatiou@ceg.gr

Trader, Ship Owner Babak Shahbaz FuelSupply ApS Europe sales@fuelsupply.com

Supplier (Physical) Ship Owner Richard Ho Consort Bunkers Pte Ltd Asia richard@consortbunkers.com.sg

Ship Manager, Charterer Charlene Lim Pacific Ship Management PTE Ltd Asia charlene@interpacsg.com

Surveyor, Supplier (Physical) Jose Pacheco Marine Surveyor & Services S.L. Europe info@marinesurveyorservices.net

Corporate Additional Supplier (Physical) Ship Owner Kido Kimihiro Consort Bunkers Pte Ltd Asia bunkers@consortbunkers.com.sg

Supplier (Physical) Surveyor Rami Kaddourah Mediterranean Petroleum and Shipping Middle East bunkering@mps-lb.com Ship Owner Bo Jun Harley Marine Asia Pte Ltd Asia bojun@harleymarine.sg Legal M Aminul Islam Nazir Assurance Maritime Bangladesh Ltd Asia amin@assurance-bd.com Supplier (Physical) Benny Whalley Bluefone Marine Africa ops@bluefone.org


IBIA Events

THE MAIN EVENTS

After a hectic spring and summer, when IBIA helped organise and took part in a range of events, we are now gearing up for our annual highlights: the Convention in November and the Gala Dinner early next year

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his issue of World Bunkering was produced during August, when we were able to take a breather after a period with lots of speaker engagements for members of IBIA’s secretariat and board. You can read reports from several of these in this issue: the 38th International Bunker Conference, the 8th International Istanbul Bunker Conference, the Platts European Bunker Fuel Conference and Nor-Shipping. Our activities in Singapore, meanwhile, are covered the Asia Regional Manager’s report. We’ll return to Singapore in a minute, but first we should mention our oneday forum co-hosted with the Port of Rotterdam on May 16, focusing on how to improve efficiency and transparency in bunkering with the application of technology, including the use of mass flow meters (MFMs). And as summer in Europe ends, we are warming up for the autumn season with a seminar on 13 September during London International Shipping Week, where we will examine the hottest topic in town: How will the industry and IMO be getting on with adhering to the 2020 global sulphur cap? IBIA is actively engaged at the IMO as the regulatory body for global shipping grapples with the question: Now that we’ve got the date set for the 0.50% sulphur limit, what can we do to ensure it is successfully implemented? Hence this will also be one of the major issues to be debated at the IBIA Annual Convention on 7-9 November.

We are proud to host our flagship event in the world’s leading bunkering hub in terms of supply volumes, approaching 50 million tonnes per year, and a flagship port for progressive thinking: Singapore! This means we will also hear first-hand experiences from the port that has pioneered the mandatory use of mass flow meters for bunker supply, a technology IBIA believes can be a real playing field leveller if applied properly and protected against abuse. Singapore is also one of the ports working to make LNG bunkering viable, another area we will be discussing.

dozens of bunkering vessels up close. We’ll round off the social events Thursday evening with a networking dinner in an informal setting with amazing seafood. If you haven’t booked already, don’t forget to secure your place at the IBIA Annual Dinner on 19 February 2018, the only way to start London’s IP Week in style. We have once again secured the splendid ballroom at the Grosvenor Hotel on London’s Park Lane for you. We look forward to seeing you at one or more of these IBIA events.

IBIA’s Annual Convention is industry led and encourages plenty of interaction and lively debate. We look forward to welcoming as many of you as possible as this will be a great opportunity for you to participate in shaping IBIA’s agenda and direction. One of the sessions will be specifically about IBIA initiatives to create a Port Charter, and Best Practice guidelines for bunker suppliers and ethics. There will be plenty of opportunities for networking at our Singapore event, starting with the welcome reception on Tuesday 7 November at the Stamford Ballroom Foyer in the Raffles City Convention Centre. Wednesday evening we will enjoy mouth-watering Asian cuisine at the Stamford Ballroom. On Thursday afternoon, we aim to offer a tour of the port, including heading out to Singapore’s busy anchorages where you can expect to see lots of ships and

The only official magazine of IBIA, World Bunkering autumn 2017

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interview

NEW HORIZONS Justin Murphy talks to World Bunkering about his first few months as CEO of IBIA and his plans for taking the Association forward

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ustin Murphy, who took up the position of Chief Executive Officer at the International Bunker Industry Association in mid-February this year, brings with him an impressive and relevant leadership record. He has held director and board positions at several firms involved in shipping around the world, including Brightoil, Teekay, AET, Macquarie Bank and most recently Acuity Shipping. WB: What made you apply for the role at IBIA, and has it been what you expected? JM: The CEO role at IBIA was appealing because of the global scope of the job, the interaction with our membership and also the sense that our entire industry is going through some significant changes that are unprecedented in the space of just one generation. It’s an exciting and challenging time to join IBIA, and the role has been every bit as challenging as I had hoped that it would be. WB: Has your impression of the bunker industry and IBIA changed since you took up the post? JM: I haven’t stopped learning since day one. Over the past few years I’ve been directly and indirectly involved in the bunkering industry and mainly seen the business from a ship owner’s perspective. This included being responsible for the bunkering activity at what was then the world’s largest publicly listed tanker owner; working in the Commodity Division of an entrepreneurial investment bank who structured risk management products for fuels buyers; and as CEO at Brightoil Shipping Singapore,

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where we were one of the very earliest operators of mass flow meters (even having them installed on our Aframax and VLCC tankers as well as the bunker barges). However, over the past few months I’ve also come to appreciate that the range of specialisms across our industry is a vast area that no single person can legitimately claim to cover. This factor also highlights the value that IBIA can bring to its membership. IBIA has access to all of this specialist knowledge around the globe and is able to harness this for the benefit of its membership. I’m constantly reminded of this through my interaction with our members – whether these are surveyors,

chief engineers, laboratory testing specialists, chemical engineers, lawyers, terminal or port operators. WB: Where do you see IBIA playing a role and what are your thoughts on how IBIA can best serve its members? JM: The needs of our members vary greatly due to the significant difference in the size and activities of the companies that we represent (we also have many individual members). However, even in the largest companies we are still dealing with individuals. It’s important that we listen to the concerns and meet the needs of every one of these bunker industry professionals.

Justin Murphy

The only official magazine of IBIA, World Bunkering autumn 2017


ood communication and the two-way flow of knowledge is the life blood of an organisation like ours. We are working hard to reduce any barriers to communication (such as our internal systems and processes). This corporate detox will ensure that our arteries are unclogged and that IBIA is functioning healthily, so we’ll be better equipped to meet our members’ needs. In 2018 one of our key priorities will be education. In fact, we have already held discussions with the board and begun to engage with potential partners. We have ambitious goals when it comes to education and will have to approach these on a phased basis. This will enable us to better understand and appreciate the needs of the industry and allow room for us to adapt. Across the board, not only with education, partnerships will prove to be an important factor in developing IBIA’s future. We do have resource constraints and therefore partnering with quality-oriented companies that can complement our own needs is a more cost effective way of achieving our goals.

interview

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WB: You have identified four key initiatives for IBIA in 2017, namely the development of the IBIA Supplier’s Guide to Best Practice; the IBIA Guide to Best Ethical Practice, the IBIA Port Charter Accreditation; and the IBIA 2020 Working Group. When and how do you think IBIA will be able to deliver on these initiatives? JM: The key point is that we will deliver on these initiatives and it’s very much case of action rather than words at IBIA these days. Each of these initiatives will deliver tangible benefits to our membership and each of these initiatives will reflect the input of our membership. The two guides and the Port Charter Accreditation will each result in a document whereas the 2020 Working Group will be managed via an online portal. We’ll be providing an update on each of these at our convention in Singapore on 8-9 November. The Convention will be a great opportunity to network, to attend training events and to participate in the debates at the convention.

The only official magazine of IBIA, World Bunkering autumn 2017

WB: How would you like to see IBIA evolve, and where do you see its priorities in the future? JM: We have a very clear vision of where we are going. Today IBIA is not meeting its full potential. We have recognised this as a board and our focus is now on improving our membership value proposition and on our project execution skills. Our members deserve the best and we’ll deliver it for them. We will become a leading global membership organisation, with a fully engaged global membership and recognised as the leading experts in our field. We will also play a role in creating a clearer and more compelling story around the contribution that our industry makes to global society. The bunker industry has a great story to tell and we need to do this more effectively. IBIA can begin to achieve much of this through the better use and application of technology. It’s a great opportunity for us as the tools available today allow us to manage information and pursue our strategic initiatives with greater dexterity and focus than has ever been possible before. We’ll be digitally enhanced rather than disrupted!

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EVENT REVIEW

Panel debate at IBC 38 ©IBC SA

IBC 38 sets sights on 2020 compliance The world’s longest running bunker conference is under new management

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n April 2017, the International Bunker Conference gathered industry professionals for the 38th year running, but some things were new. It is no longer organised by BI Norwegian Business School, but by “The International Bunker Conference (IBC) SA”. IBC SA is committed to carry forward the heritage of the conference, which has traditionally been held in major cities in Scandinavia. This year there was a new twist, as IBC 38 was held aboard the enormous 5-star cruise ferry Color Fantasy. IBC 38 set sail from Oslo in the afternoon on 26 April, returning on the morning of 28 April after a round trip to Kiel. In the meantime, IBC 38 delegates had enjoyed two lunches, two dinners, and two splendid evening musical shows staged in the ship’s large internal amphitheatre. During the daytime, the conference chairman Niels Bjorn Mortensen and a selection of speakers were the stars of the show as IBC 38 took over the stage in that very same amphitheatre. The theme for IBC 38 was “2020 - The day after tomorrow” and the focus was very much on how the industry is preparing for the 0.50% sulphur limit, and trying to understand how the regulation can be effectively and fairly implemented. Many well-known speakers shared their views.

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The first speaker was Olav Akselsen, Director General of Shipping and Navigation at the Norwegian Maritime Authority, who explained Norway’s approach to enforcement of the sulphur regulations. About half of Norway’s coastline is within an emission control are (ECA), hence the country has been active in checking ships against the 0.10% sulphur limit applying in ECAs. Norway took fuel samples from 204 vessels in 2015, of which 11 (about 5%) were found to violate sulphur limits. In 2016, Norway took fuel samples from 203 vessels and also undertook 265 document inspections. This time, about 2.5% of vessels were found to be in violation, but Akselsen said he was worried the trend for 2017 was going in the wrong direction, with several ongoing cases which could lead to fines. Norway is one of the countries that are able to dish out fines directly to the shipowner, master and crew for sulphur violations without having to go via courts first. The country is beefing up its inspection tools in preparation for 2020 by purchasing more handheld test devices which can quickly indicate whether the fuel on the ship is compliant or not, though any violations found this way will still need to be confirmed by tests in an appropriately accredited laboratory.

The ship that hosted IBC 38 also accommodates a piece of kit that is of key interest to the industry these days; namely an exhaust gas cleaning system, or scrubber. Color Line’s Senior Vice President Technical, Jan Helge Pile, shared the experiences and plans of the company, which has six ships that operate 100% inside ECAs, of which the four biggest have scrubbers. Prior to 2015, the company’s fuel consumption was typically 92% heavy fuel oil (HFO) and 8% marine gas oil (MGO), this has changed to around 75% HFO/25% MGO. In 2016, the company’s six ships consumed 95,000 tonnes HFO and 35,000 tonnes MGO with no more than 0.10% sulphur. It is also using shorepower electricity which currently accounts for about 1% of its total energy consumption; this share is expected to grow in the future. Pile said Color Line had chosen to install scrubbers only on the main engines on its four biggest ships because smaller installations are not cost effective. The scrubbers used by the company can clean exhaust emissions from fuels with up to 2.3% sulphur content down to the required 0.10% sulphur equivalent for ECAs. They use open loop scrubbers in combination with continuous emissions monitoring systems (CEMS).

The only official magazine of IBIA, World Bunkering autumn 2017


ile said there are some issue with the readings at times, caused by issues with the sensors which are 3 metres long, subjected to an acid environment and prone to failing and needing frequent replacements. Other than that he was happy with the reliability of the systems, the support and maintenance offered by the manufacturer, and said although it meant more work for crew it is manageable, and no extra crew was required to cope with the extra work load. The subsequent speakers included Dr Jasper Faber of CE Delft; BIMCO’s Deputy Secretary General, Lars Robert Pedersen; Monique Vermeire, Fuel Technologist at Chevron; John Stirling, Quality Manager at World Fuel Services; Eirik Nyhus, Director of Environment and Regulatory affairs at DNV-GL; Timothy Wilson, Principal Specialist on marine fuels and exhaust emissions at Lloyds Register; IBIA’s chairman Robin Meech of Marine Energy and Consulting Ltd; and IBIA’s IMO Representative, Unni Einemo. What follows is a summary of some of the key points from these speakers. First of all, although the official availability study done for the International Maritime Organization (IMO) concluded that there will be sufficient refinery capacity to produce low sulphur fuels for shipping in 2020, there are concerns that this won’t translate into real availability for the marine fuels market as this is not the primary market for refiners. There are also concerns about the quality of 0.50% sulphur fuel blends, and that there will be a huge number of different products that will be incompatible. Non-compatibility of fuels is not a new issue so ships should have procedures to deal with it, but is expected to become more of a challenge. Supply will also become increasingly complex because of the many product types that must be stored in segregated tanks. One of the key differentiators between low sulphur fuels products is whether or not the fuel needs heating. This may be taken into account for the next revision of ISO 8217.

Another point that was highlighted was how the non-availability clause in MARPOL Annex VI will be applied, an area that needs to be carefully examined at the IMO to prevent creating a wide-open loophole. One of the unknowns is whether a ship will be able to claim non-availability if the only compliant fuel available in a port is unsuitable for that ship’s fuel system. There are many uncertainties, which all play against each other creating unwillingness to commit. Uncertainty about compliance levels may slow down the uptake of scrubbers. Another problem is that owners are not yet preparing for 2020 largely because they have no money to spend and are struggling simply to stay in business. Early scrubber investments will have the quickest payback, but the peak for scrubber installation is not expected until after 2020. Uncertainty about compliance and the anticipated scrubber uptake may also hold back refinery efforts to meet demand for 0.50% demand. In fact, we probably won’t get a good handle on the choice and availability of compliance until sometime in 2019. One of the main challenges will be to enforce the sulphur regulations globally. The effectiveness of enforcement and good level of compliance seen in ECAs may not translate to the global scene, and enforcement at sea is particularly uncertain. When it comes to enforcement, compliance monitoring technology, in particular remote sensors, or sniffers, is expected to play a growing role. According to Johan Mellqvist, Professor, Chalmers University, Gothenburg, the remote sensors used on drones have so far not been very reliable compared to larger fixed installations near shipping lanes.

The only official magazine of IBIA, World Bunkering autumn 2017

Sniffers have to be very small and light to be carried by a drone, but Mellqvist said this meant they are 1,000 times less sensitive than the fixed installations such as those used near the port of Gothenburg and on the Great Belt Bridge. For the drone’s sniffer to be effective, it would need to be within 75 metres of the ship and be in the ship’s smoke plume for at least 30 seconds. The fixed installations, by contrast, are effective up to 7 km away from the ship according to Mellqvist. He said about 3.8% of ships passing under the sniffer installed on the Great Belt bridge indicated that the ship was using fuel exceeding 0.15% sulphur, which is the sensitivity limit for this sniffer. Malfunctioning scrubbers have been detected on several occasions, he added, indicating that several ferry liens appear to be operating with malfunctioning scrubbers. Other interesting observations from sniffer readings was that they have shown that ships switch back to HFO too early when leaving ECAs, with some 13% of ships in the English Channel switching back to HFO before they are outside the ECA. In waters around Denmark and throughout the Baltic, about 5% noncompliance has been observed based on sniffer readings. Mellqvist said the non-compliance cases had not shown any link to specific flag states, but have often been linked to specific owners/lines. As the Color Fantasy sailed under the Great Belt bridge, IBC 38 delegates gathered for a champagne toast on the upper deck. We trust that the scrubber on the ship was functioning as it should and that the sniffer installed on the bridge picked up only harmless bubbles as we passed beneath it.

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EVENT REVIEW

Platts conference explores current trends and the road to 2020 The 0.50% sulphur cap loomed large on the agenda, but we also heard about the changing dynamics of the bunker market

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he road to 2020 – emissions impossible?” was the theme for the Platts 8th Annual European Bunker Fuel Conference, held in Rotterdam on 17-18 of May, but it also covered a range of other subjects. The event was expertly chaired by IBIA’s chairman, Robin Meech of Marine Energy and Consulting Ltd. Jérôme Leprince-Ringuet, Strategy & Global Cap Implementation Director, Total Marine Fuels, gave a comprehensive overview of the 2020 issues. The global 0.50% sulphur cap is a significant disruptive factor, he said, and we will need innovative solutions on a case-by-case basis – there is no ‘one size fits all’. Some ships will be good candidates for installing scrubbers, some owners will invest in LNG fuel systems, while many won’t invest in any of these and rely on the supply side to provide compliant marine fuels, whether that is marine distillates or very low sulphur fuel oil (VLSFO). How the supply market prepares will also vary. Oil majors will likely provide a range of fuel solutions for 2020, including oil-based fuels,

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LNG as well as supply of high sulphur fuel oil (HSFO) to ships using scrubbers, though the latter could disappear from some ports around the world. LNG as fuel is still an emerging market and needs to become more competitive to be attractive. While the base product is very competitive, supply infrastructure is very expensive and reducing the cost of getting LNG to ships is key to making LNG use more widespread, LeprinceRinguet suggested. Bunker traders will blend 0.50% sulphur VLSFOs, which will have to go from a non-existing product to up to 2-3 million barrels per day in 2020. He pointed out that meeting this demand this will require changes refinery settings and global supply chain adaption, including securing the right refinery components and adapting storage and blending facilities. We will need a strong price signal to make it happen virtually overnight. Suppliers will also have a challenge in deciding how to use their barges; which products should they supply, and where?

Exactly how much time would it take to prepare for the shift from supply of mostly 3.50% to 0.50% sulphur fuels? Ronald Backers from the Port of Rotterdam provided an interesting insight. If Rotterdam starts building stocks to prepare for the 0.50% sulphur limit on 1 September 2019 there would need to be a build-up of a million barrels per day to have sufficient products in place by 1 January 2020, by his calculations. The port has never had to deal with something on this scale before, and it is hard to tell if three months is sufficient to get ready. It would be very tight, he predicted. While the speaker from Total expressed trust in the global refining industry’s flexibility to adapt and provide the right fuel mix to ships, Eddy Van Bouwel, Senior Advisor for IPIECA was perhaps more cautious as he put the refiners’ position on the road to 2020 into perspective. The extra volume of low sulphur fuel needed globally in 2020 is huge and while market signals triggers refinery investments, there is a big gap in anticipated distillate output versus demand expectations.

The only official magazine of IBIA, World Bunkering autumn 2017


efinery sulphur recovery capacity must rise by about 15% in 2020 from today’s level to meet low sulphur fuel demand for shipping, he explained. By comparison, the EU reduction of the sulphur limit for gasoline to 10 ppm required a 2-3% increase, and the 0.10% ECA sulphur limit in 2015 required less than 2% increase in refinery sulphur recovery capacity. Refiners have many different options, some of which require major investments and how they respond to the changes in product demand will vary. Some of these refinery changes are happening already. Since 2015, all the big Russian HFO exporters have embarked on refinery upgrades so Russian HFO exports are in decline, Ned Molloy, Managing Editor, Fuel Oil, S&P Global Platts told the conference. Meanwhile, Iraq has increased exports of HFO from around 50,000 tonnes per month in 2016 to 200,000 tonnes per month in 2017, much of which has ended up in Singapore, he said. Andrew Laven, Regional Manager for Middle East & Africa at Bomin, said there will be enough fuel in 2020, but the question is where will it come from, how much will it cost and will shipping companies be willing to pay for it? He said the Middle East was very well placed as it has both low sulphur distillates and HSFO available to meet the relevant demand. What is the most cost effective way for ships to meet sulphur limits in 2020? An investigation undertaken by Elizabeth Lindstad, Senior Research Scientist, Sintef Ocean, found that scrubbers give the lowest cost for the big consumers, i.e. large vessels with large engines. For ships with fuel consumption below 10,000 tonnes per year, buying low sulphur fuels may be more cost effective. For LNG to be competitive against scrubber installations, it has to be cheaper than HFO at the point of delivery to ship in order to pay back the high investment cost for an LNG fuel system, she concluded.

Preparations for 2020 are taking place against a backdrop of changing market dynamics. Adrian Tolson of the consultancy 2020 Marine Energy introduced the word “disintermediation” to describe the current trend: the removal of intermediaries from the supply chain. He said 2000-2014 was the era of the bunker trader, with brokers and smaller independent suppliers in decline, but the OW collapse marked the end of that era. We are now in the era of disintermination, meaning fewer middlemen in the bunker transaction chain and hence the role of bunker traders is in decline, with a rise in the dominance of commodity traders, regional refineries and to some extent oil majors in the supply chain. From 2020, Tolson predicted that cargo traders will still be dominant, and we may see a ‘rebirth’ of oil majors as bunker market players. At present, however, traders are still needed because they perform as the ‘bankers’ for the industry, providing credit which a struggling shipping industry needs. The trend is therefore for bunkering companies to become bigger as only those that are well-funded will be able to provide credit. They must also be highly productive and have a high turnover because profit margins are down. Traditional brokers have not gained business from reduced use of traders, except maybe as digital intermediaries, Tolson said, as brokers cannot provide credit. The good news is that 2020 may break the cycle of declining profit margins that has plagued the bunker trading and supply industry.

The only official magazine of IBIA, World Bunkering autumn 2017

Bart Joon, Marine Quality and Quantity Management at World Fuel Services spoke about the impact of mandatory mass flow metering for heavy fuel oil deliveries in Singapore since the start of 2017. MFMs for gasoil will also become mandatory in Singapore, probably in 2018. Joon said mandatory MFMs has led to approximately 25% increase in efficiency as the estimated time saving is three hours on a 2000 tonne delivery. Accuracy is good, usually at +/- 0.1%, while the accepted accuracy deviance for the technology is +/- 0.5%. Joon was positive about MFM technology, saying it provides clarity for buyers and suppliers. While some had speculated that mandatory MFM use would push up bunker prices in Singapore and potentially dent demand, it appears to have had a positive impact on sales volumes in the port, with Singapore bunker sales predicted to reach 50 million tonnes in 2017. “We have an industry in transition, ” Meech said in his closing remarks, noting the many challenges in the run-up to 2020 and the middle man disappearing in bunker supply chains. With less than three years to go before the 0.50% sulphur limit kicks in, the most common strategy still seems to be “wait and see”. We know our options; we just don’t know which way decisions will go.

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Company News - Petrol Ofisi

THE POWER OF PETROL OFISI AT THE SEAS PO MARINE met with the representatives from the bunkering sector

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s the sole distributor and producer of transit marine fuels, SCT-free marine fuels and marine lubricants for the Turkish Maritime Sector, PO Marine met with the sector representatives at 8th International Istanbul Bunker Conference. PO Marine officers provided information about fuel and lubricants services, one of the most important topics of the sector, throughout the conference. Opening of the 8th International Istanbul Bunker Conference organized by the Turkish Bunkers Association was hosted by PO Marine. Within the scope of the conference organized in May for 3 days, around 200 bunker sector representatives from 20 countries came together.

had the opportunity to meet, acquaint and exchange opinions with the sector representatives. PO Marine executives provided information to the participants about fuel and lubricants services which is one of the most important topics of the sector and emphasized that PO Marine brand offers high performance fuel and lubricants to its customers located at anywhere on the world through its high quality and fast service thanks to its staff with marine origin. PO Marine’s expert team highlighted that they instantly respond to fuel and lubricants requests received

from all ports in the world thanks to their wide service network, and also stated that they are undergoing a continuous and sustainable growth in the marine sector with the power of Petrol Ofisi brand. PO Marine offers bunker service in 65 countries, and has 8 marine terminals and 1 floating station located along the Turkish coastline. PO Marine has the biggest distribution network of Turkey with 16 marine tankers and barges, serves throughout the country with 5 marina stations.

PO Marine brings the power of Petrol Ofisi, the leader of fuel and lubricants sector, to the seas. PO Marine, the only brand that can provide fuel bunkering as well as lubricants bunkering in the sector, is the sole distributor and producer in Turkey that offers both transit and SCT-free fuel sales services. Sharing its power in the sector with bunker suppliers, traders, brokers, and survey / surveillance institutes operating globally within the scope of 8th International Istanbul Bunker Conference, PO Marine officers also

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The only official magazine of IBIA, World Bunkering autumn 2017


EVENT REVIEW

Conference delegates on the Bosphorus ©Istanbul Bunker Conference.

Turkish delights The 8th Istanbul Bunker Conference offered quality speakers and truly special social events

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he 8th Istanbul Bunker Conference took place on 10-12 May, and as in previous years attracted numerous delegates, high level government and industry support, quality speakers and truly special social events. Ali Deniz Eraydin, Chairman of the Turkish Bunker Association, gave a warm welcome to international guests and thanked them for joining this bi-annual event despite difficult times in Turkey. Of the 16 speakers, 12 were from outside Turkey, including five from IBIA. In total, some 250 people attended the conference and the social events. The conference looked at the Turkish market, helped raise awareness about the International Maritime Organization’s 2020 global 0.50% sulphur cap and associated challenges, the need for education and training for the times ahead, risk management, and more.

Some 50,000 ships pass through the Turkish straits every year at present, and Istanbul bunkers up to 35,000 of them, Eraydin said. The aim is to bunker 50,000 ships in 2020. Turkey’s bunker sales grew 15% in 2015 and a further 12% in 2016 to 2.8 million tonnes, with physical supplies in the Istanbul region accounting for 85% of the total, according to Sinem Okumus from the Turkish Energy Market Regulatory Authority (EMRA). She said 40% of total bunker sales in 2016 were distillates; this share is expected to grow in 2020. IBIA chairman Robin Meech of Marine and Energy Consulting chaired the conference, and was also one of the speakers giving a comprehensive overview of the issues surrounding the change from the 3.50% to a 0.50% sulphur limit for marine fuels globally in 2020.

Neslihan Yalcin and Deniz Eraydin of CYE Petrol at the conference dinner party ©Istanbul Bunker Conference.

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He said the demand increase associated with the switch to 0.50% sulphur fuel in 2020 is about 20 times bigger than the demand increase for 0.10% sulphur fuels associated with the new emission control area (ECA) limit in 2015. He noted that the blended fuels we may expect to be on offer to meet the 0.50% sulphur limit have not yet been tested commercially, and there are several concerns about the quality of these fuels and compatibility between potentially hundreds of different blends. Donald Gregory, Director of the Exhaust Gas Cleaning Systems Association and a former IBIA chairman, said shipping is facing unprecedented uncertainty and risk ahead of 2020 against a background of weak rates, low growth in trade and no imminent relief to ship oversupply. Because of this, we have a 2020 conundrum: scrubber installation capacity is at an all-time high but money is sparse and there is no benefit to early installation, except for ships operating mainly inside ECAs. Gregory suggested that a “massive switch” to low sulphur fuel in 2020 could push the initial price differential between low and high sulphur fuel oil (HSFO) to as much as $600 to $800 per tonne. Meech suggested a more conservative differential between 0.50% sulphur compliant fuels and HSFO, in part because he is not convinced of high initial compliance. He projected that the price differential between 0.50% sulphur product and HSFO may rise to as much as $400 for a while, but it may be closer to $240, compared to current low/high sulphur bunker fuel price differentials of around $170 per tonne.

The only official magazine of IBIA, World Bunkering autumn 2017


EVENT REVIEW Conference delegates outside the Hagia Sophia ©Istanbul Bunker Conference.

In both price scenarios, scrubbers would offer a quick payback. Scrubber economics does not look viable for ships that are 15 years or older, but for newer and large ships payback could be less than two years. Despite that, the initial volume of scrubbed fuel is expected to be low, but it could double, triple or even quadruple from 2020 to 2025. The possibility that demand for HSFO may recover could dissuade refiners from investing billions in upgrades to convert fuel oil to higher value, low sulphur products, Meech pointed out. The biggest problem in 2020 won’t be a shortage of compliance options or funds to comply with regulations, but the lack of seafarers with the right training, IBIA board member and industry consultant Nigel Draffin told the conference. He said there is already a deficit and the shortfall is set to get worse, especially of officers such as engineers and superintendents. There is already a competence gap in running centrifuges to remove impurities in fuels, and operations will be more challenging in 2020 because fuel handling is becoming more complex with the various types of low sulphur fuel oils that will bring specific storage and handling requirements. Marine gas oil (MGO) is increasingly having issues such as poor cold flow and we will also need competence to use fuels containing fatty acid methyl ester (FAME). Then there is all the extra training required to operate with new types of fuel such as LNG and other low flashpoint products entering the market. In addition, training will be needed to operate ships with scrubbers, and Tier III NOx requirements will also make operations more complex. Draffin said this must be addressed by increasing focus on education and training of existing and new staff in the sector, and by offering higher wages to attract the right staff.

What is a green ship? Increasingly, that will be a ship that emits less CO2. Professor Mustafa İnsel, Hidroteknik Nautical Design Technologies Ltd, told the conference that ships may become up to 50% more energy efficient by 2030 using all available operational and technical measures, but measurements of effectiveness are open to uncertainty which suggest there is a need for an evaluation platform, or a “database of real success”. This is currently missing because the focus at the European Union and the IMO is on setting up systems for reporting fuel consumption data. This reporting will not, however, help quantify how effective each measure is, and vendors of efficiency solutions are often exaggerating claims, the professor said. Turning to other industry issues, Can Ertem, Group Credit Manager at Ocean Connect Marine, spoke about how competition and squeezed margins in the bunker supply business has led to very aggressive trading.

This comes against a backdrop of prolonged weak earnings in most shipping sectors since 2008, which has created more risk of counterparty defaults. Even so, some traders are extending credit to companies that are a default risk, because it can be worth it if the margins are better. It is not uncommon for suppliers and traders to extend unsecured credit in connection with spontaneous deals for relatively small stems when there is not enough time to check with banks. On the other hand, we have seen tightening credit from physical suppliers to traders in the wake of the OW Bunker debacle. Credit insurers are also more cautious after the collapse of big players like OW and the major shipping company Hanjin, and other similar company bankruptcies, which has led to increased insurance premiums. It all makes for a challenging environment when it comes to balancing risk and reward.

Deniz Eraydin leading the way to one of the conference social events ©Istanbul Bunker Conference.

The only official magazine of IBIA, World Bunkering autumn 2017

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EVENT REVIEW

Robin Meech flanked by Melisa Eraydin and Neslihan Yalcin of CYE Petrol, who was a key member of the conference organisation team ©Istanbul Bunker Conference.

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ill there ever be standard terms and conditions in the bunker industry? This was the question posed in the presentation given by Maritime Arbitrator and Mediator Trevor Harrison, who is also the company secretary for IBIA. In some respects this is already happening because contracts are being copied creating a certain standardisation all by itself, he observed. Contract terms need to cover a range of areas: There is the commercial side relating to the type of product, price and credit terms; there is the technical side relating to measuring quantity, product quality and taking samples during delivery; then there is the legal side governing things like dispute resolution, jurisdiction, time limits for claims, bankruptcy and liens; and finally a regulatory side relating to MARPOL Annex VI, SOLAS and adherence to other regulatory standards. Perhaps the way forward is to create standard clauses rather than standards terms, Harrison suggested. One example of this was the BIMCO dispute resolution clause. Another idea was to create a standard fuel sampling and analysis procedure and protocol. And, in the wake of the fraught situations seen since the collapse of OW Bunker, we need ideas regarding the right to be paid that works better than the present uncertain retention of title clauses and maritime liens. One possibly fairer approach that has been suggested is that everyone in the supply chain should only be entitled to retain their own share of the margin/profit that they could expect to earn from the transaction. Whilst this is superficially attractive, Harrison’s view was that it would be extremely difficult to turn into a workable proposition.

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What is ethics, and how does it apply to the bunker industry? Justin Murphy, the Chief Executive Officer of IBIA, offered a fresh take on this prickly question. He said ethics can be defined as a moral code of conduct; doing the right thing even if law does not require you to. The question is not just how others perceive the bunker industry, but also: “How do we perceive ourselves? ”Murphy said we should take pride in the fact that the bunker industry powers global trade, creates jobs and contributes to charity. It is time to focus on the positives, not just the negatives and move toward a future where bunker industry participants are seen as positive role models in society and trusted partners, in turn improving customer and employee loyalty.

To this end, IBIA will work to establish a guide to ethical best practice containing elements such as principles of conduct, integrity, transparency openness, confidentiality and discriminatory conduct. The work will include surveying and IBIA’s members about their views and concerns, and partnerships with experts. Besides the presentations, the Istanbul Bunker Conference has a tradition for exceptional hospitality, and the 8th event kept it up in great style. The highlights were a boat trip on a large motor yacht taking in the many wonderful sights of Istanbul as seen from the Bosphorus in the afternoon sun, followed by an early evening private guided tour in one of Istanbul’s most important historical buildings, the beautiful Hagia Sophia. We’ll let the pictures tell the rest of the story.

Robin Meech and Deniz Eraydin ©Istanbul Bunker Conference.

The only official magazine of IBIA, World Bunkering autumn 2017


EVENT REVIEW Sturla Henriksen, CEO of the Norwegian Shipowners’ Association at the Nor-Shipping opening conference

Nor-Shipping: Digitalisation, disruption and dire straits Unni Einemo reports from the bi-annual maritime event in Oslo, Norway

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here was an odd mood at Nor-Shipping, which ran from 30 May to 2 June, as an industry that is still in the doldrums kept hearing about changes that mean the future of shipping will be radically different from what we know today. Nor-Shipping mixes a large trade fair, or exhibition, with a range of events. On the one hand, many noticed a distinctive reduction in the number of exhibitors and visitors to the exhibition halls. On the other hand we had the buzzwords of the week: ‘catalysts for change’, ‘disruption’ and ‘innovation’. The renowned futurist Tony Seba commanded attention at a glitzy opening conference as he predicted that major disruptions – which is when a new product or service helps create a new market but destroys others - will come from outside the shipping sector and hit it hard, in the same way phenomena like Amazon and Uber have disrupted retail and taxi services. He predicted that by 2030, there will be an 80% reduction in private car ownership as people switch en-masse to self-drive electric vehicles, also leading to a collapse in oil demand.

“We are on the cusp of one of the deepest, fastest disruptions in transportation in history,” Seba told Nor-Shipping. So there goes the future for oil tankers, and to large extent car carriers, then. Speaking of revolutionising transport, the opening conference also featured Bipop Gresta, co-founder and chairman of Hyperloop Transportation Technologies, which promises to eliminate traffic congestion and air pollution by transporting people and goods via highspeed vacuum suction tubes. Seba said that smart people and experts “consistently fail to recognise a disruption” and there are many examples, such as AT&T missing out on the mobile phone revolution. While these speakers were entertaining and thought-provoking, did they feel relevant to the present situation in shipping? Shipping is still suffering from a deep and protracted downturn, making near-term survival hard enough as the sector tries to stay on top of fast-paced developments of the current “mega-trends” for digitalisation and other technological advancements along with the onslaught of new regulatory requirements.

The only official magazine of IBIA, World Bunkering autumn 2017

“By inviting innovative players from outside the industry – such as Siemens, HTT and Crowdstrike – to mix with shipping’s sharpest minds we saw a collision of ideas and potential that can help define our collective future. It demonstrated a new way of working together, pulling in inspiration and talent from wherever it resides and seeing how we can adopt and adapt it to benefit maritime. In a fast changing world, shipping needs to keep pace and this was our way of helping the industry accelerate,” said Nor-Shipping Director Birgit Liodden. Dazzling stuff, no doubt leaving shipping executives wondering which trends and tech trailblazers they should place their bets on to make them fit for the long term future of cleaner and leaner shipping. Among the longer term trends most agree on are more use of data and technology for such purposes as efficiency gains and better information sharing, a move toward decarbonisation of shipping and, for some, toward remotely operated autonomous ships.

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Sturla Henriksen, CEO of the Norwegian Shipowners’ Association, was optimistic that, even as the world may move away from globalisation to more regional trade, shipping is part of the transport solution. But if you have long term ambitions for your company you need to stay on top of developments. IBIA was at Nor-Shipping to participate in a panel debate organised by DNV GL entitled “2020 and beyond. Playing your cards right” alongside shipping executives and an admiral from the US Coast Guard, discussing the many concerns surrounding the global 0.50% sulphur cap

which we have covered in reviews from other event reviews in this issue of World Bunkering. We also did a quick survey of three of the scrubber manufacturers that we found in the exhibition halls at NorShipping, to find that one of them had orders for scrubber installations on 12 ships in total but had not seen any new orders since 2015, another more recent entrant had orders from 25 ships in total so far and reported “lots of enquiries”, while the most successful scrubber maker of them all was Italy-based Ecospray Technologies, a subsidiary of a large cruise group. With over 250 scrubber installations since 2012,

mostly on cruise ships but also on ferries and tankers, this company appears to have quietly taken the lion’s share of the exhaust gas system market to date. The theme at the next Nor-Shipping in 2019 will be ‘accelerate’, following on from this year’s ‘catalysts for change’ as Liodden says “we need to find the right partners to switch our development into overdrive – to finally rid ourselves of the historical, cyclical problems that plague us and access new potential.” Time will tell if the 2017 exhibitors will be back, or if developments have accelerated so fast that they fell off the back of the curve.

Bipop Gresta, co-founder and chairman of Hyperloop Transportation Technologies at the Nor-Shipping opening conference

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The only official magazine of IBIA, World Bunkering autumn 2017


industry news Seaspan’s two new ferries combine LNG propulsion with energy storage systems

BV’s new energy storage rules

Responding to the growing number of hybrid vessels entering service, Bureau Veritas (BV) has issued a new series of notations and rules addressing the requirements of energy storage systems (ESS) to support ship operators in reducing emissions

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he French classification society has issued a new chapter in its rules providing a framework for electric and hybrid power solutions. The new class notations include power management (PM), power back-up (PB) and zero emission (ZE) standards. BV expects that the notations will encourage wider uptake of energy storage systems (ESS) to provide both operational and environmental benefits. Martial Claudepierre, Business Development Manager, Bureau Veritas, said, “Industry uptake of hybrid and battery technology has been driven by environmental regulation. But owners are also finding performance benefits and, for some operations, significant financial benefits seem likely – particularly as the availability of renewable energy increases.” Innovation has been led by the cruise and ferry sector, but wider adoption is being anticipated says Claudepierre. Electric power provided by an ESS can be used when a ship is in port, during manoeuvring or alongside, to reduce or eliminate local air emissions when in proximity to centres of population or in emission control areas (ECAs). Importantly, ESS can also provide peak shaving, power smoothing and power for DP (dynamic positioning) operations, providing operators with flexible efficiency in meeting operational requirements.

“Obvious candidates for ESS are cruise ships with high hotel loads when in port, ferries with regular port visits and tugs with heavy peak load requirements. Ships with relatively short voyages making regular port calls could plug into local power enabling access to electricity from renewable energy sources as well.” Seaspan’s two new ferries delivered this year also broke new ground by combining LNG propulsion with ESS. “We will see more of these hybrid solutions ordered and our new rules and notations will help ensure that these systems can be designed and operated safely and efficiently”, adds Claudepierre. Stolt-Nielsen orders bunkering-capable LNG carriers Stolt-Nielsen subsidiary, Stolt-Nielsen Gas has ordered two small LNG carriers that could be could be used for bunkering The two 7,500 cubic metre vessels have been ordered from Keppel Singmarine, with options to purchase three additional similar ships. The contract for the initial two ships is valued at approximately US$80 million, including site-team costs and capitalised interest during construction. The ships are to be built at Keppel Singmarine’s shipyard in Nantong, China, with deliveries scheduled in the second and third quarter of 2019 respectively.

The only official magazine of IBIA, World Bunkering autumn 2017

The ships will be capable of operating on either diesel fuel or LNG, with a class notation and technical capability for ship-to-ship bunkering. Stolt-Nielsen Gas has established a wholly owned subsidiary, Avenir LNG Limited, to focus mainly on the development of smallscale LNG supply chains serving “stranded demand,” where off-the-grid customers lack access to natural gas. SNG’s current projects include plans to build and operate an LNG terminal and distribution facility in the port of Oristano, Sardinia, and a venture to provide LNG to areas of Scotland not served by the existing natural-gas grid. The newbuildings would be deployed, at least in part, in the supply chains serving these projects but the company has the option of using them for bunkering operations. Tier III compliant vessel The first vessel operating with IMO Tier III EIAPP (Engine International Air Pollution Prevention) certified Wärtsilä diesel engines was launched in July. The 72 metre polar logistics vessel the L’Astrolabe is fitted with a complete Wärtsilä propulsion machinery package and Wärtsilä NOR (NOx Reducer) SCR (Selective Catalytic Reduction) exhaust gas cleaning systems for all the main engines.

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industry news

The L’Astrolabe is the first vessel operating with IMO Tier III certified Wärtsilä diesel engines

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he ship was built by PIRIOU (France) for the French Southern and Antarctic Lands Administration and will be used to transport personnel and supplies to the Dumont d’Urville research station in Antarctica. The four IMO Tier III certified 8-cylinder Wärtsilä 20 diesel engines are combined with Wärtsilä NOR systems to be fully compliant with the IMO Tier III exhaust emission regulations set out in Annex VI of the MARPOL 73/78 convention. The IMO Tier III EIAPP certification was carried out according to Scheme B based on the requirements of IMO Resolution MEPC.198(62). The Tier III EIAPP certificates were issued by Bureau Veritas. SCR technology is currently the primary means for NOx abatement, and Wärtsilä’s NOR system is available for use with all Wärtsilä medium speed engines. The system enables vessels to be compliant with global NOx emission control area regulations. Furthermore, with the Wärtsilä NOR the overall performance of the engine and exhaust gas cleaning system is optimised in terms of emissions reduction, noise abatement and engine efficiency. Wärtsilä provides IMO and EPA Tier III certificates for its engines combined with a Wärtsilä NOR system. APL cuts CO2 emissions by nearly half Container carrier APL, acquired last year by MA CGM, says its fleet had reduced carbon dioxide emissions by 48% in 2016, compared to a base level in 2009. The emission reduction was verified by Lloyd’s Register Group according to the Clean Cargo Working Group (CCWG) verification protocol and ISO14064-3:2006 standard. This latest achievement marks APL’s seventh consecutive year of improvements.

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“APL is pleased to register our best carbon reduction performance as yet, improving our fleet emission level by about 3%, versus our reduction in 2015. APL prides ourselves as a responsible carrier and will persevere in our pursuits of environmental excellence as we facilitate global trade,” said APL Chief Executive Officer, Nicolas Sartini who champions APL’s sustainability course. APL’s vessel performance management and maintenance strategy have been pivotal in ensuring that its operations stay efficient and thus green. Through continual improvements in operational efficiencies, fleet and voyage optimisation, as well as the deployment of a fuel-efficient and environmentallyfriendly fleet of vessels, APL has successfully lowered its fleet carbon dioxide emission levels annually. Moving forward, APL aims to reduce CO2 emissions per container transported by 30% between 2015 and 2025, a target set by the CMA CGM Group. APL will also persist with cold-ironing development and pioneer ballast water treatment development, amongst others, by embracing technology innovation, clean energy sources and best practices.

Ecoslops boosts production, cuts costs Innovative technology company Ecoslops, which upgrades ship-generated hydrocarbon residues into valuable new fuels and light bitumen, says its first industrial micro-refinery unit (P2R), at Sines, doubled production in the first half of this year compared to the same period last year, to 12,200 tonnes. The company says that in the same time frame sales rose from 3,700 tonnes to 9,700,

tonnes while the product mix was improved due to the increase in sales, with stronger value-added products and a higher sales price per tonne. Ecoslops says that 98% of the waste products collected were regenerated into refined products. It also reports that measures taken to cut costs, relating to staff costs as well as other variable and fixed costs, significantly reduced the cost basis in conjunction with the strong growth of activity. The company stated: “These strong improvements in terms of sales and costs, demonstrate a significant increase in results for H1 2017, compared with the same period last year, and confirm the relevance and viability of Ecoslops’ business model.” It adds that it is actively developing projects at Marseilles, Antwerp, Suez Canal and Côte d’Ivoire. Gazpromneft-Lubricants expands Caspian operations Gazprom Neft subsidiary GazpromneftLubricants has started to deliver lubricants at the Caspian port of Makhachkala, Dagestan. The first supply was made to the dredger Digester under a three-year agreement with Russian-based port operator Rosmorport which was signed this spring and covers the delivery of 1,500 tonnes of marine lubricants to the company’s vessel.Makhachkala is the second Caspian Sea port, following Astrakhan, where GazpromneftLubricants supplies marine lube oils. Roman Miroshnichenko, head of the marine lube oils business at GazpromneftLubricants, says: “We supply marine lube oils to the port of Makhachkala in order to satisfy the growing market demand for marine lubricants of high quality.

The only official magazine of IBIA, World Bunkering autumn 2017


Award for Liberia’s electronic oil record book LISCR, the US-based manager of the Liberian Registry, has won the Lloyd’s List Maritime Services Award 2017 for the innovative electronic oil record book (ε-ORB), which is now accepted for use on board Liberian-flag ships. The ε-ORB, launched in 2016, is a Lloyd’s Registercertified maritime software application which has gained wide support in the shipping industry. It has been developed with the intention of enhancing onboard efficiency by ensuring compliance with MARPOL in relation to paper Oil Record Books. The ε-ORB has been designed to replace the traditional paper Oil Record Book and to establish software transparency, credibility and traceability. It addresses a variety of issues, including ORBs being reported missing on board, failure to document entries in the ORB of internal transfer of oily mixture, discrepancies between entry into the ORB and actual capacity of the oily water separator, and falsification of log entries. Christian Mollitor, vice-president of the Liberian Registry, says, “Liberia is actively planning for the wider dissemination of the IMO-compliant ε-ORB throughout its fleet, with the knowledge of a variety of international organisations, including the IMO, US Coast Guard, Australian Maritime Safety Authority (AMSA), the European Maritime Safety Agency (EMSA), Paris MOU, Oil Companies International Marine Forum (OCIMF) and numerous other flag states, including Germany, Malta, Luxembourg, Japan and Denmark, each of which has provided extremely positive feedback.” Maersk Tankers Flettner Rotor project The Energy Technologies Institute (ETI), a public-private partnership between global energy and engineering companies BP, Caterpillar, EDF, Rolls-Royce and Shell and the UK Government, is in the process of selecting further partners for a new project to analyse data from its Flettner rotor project on a Maersk vessel.

The project will be the first installation of wind-powered energy technology on a product tanker vessel, and will provide insights into fuel savings and operational experience. The rotor sails will be fitted during the first half of 2018, before undergoing testing and data analysis at sea until the end of 2019. Maersk Tankers will supply a 109,647-deadweight tonne Long Range 2 (LR2) product tanker vessel which will be retrofitted with two 30m tall by 5m diameter Norsepower Rotor Sails. Combined, these are expected to reduce average fuel consumption on typical global shipping routes by 7 % to10%. The new project will design, install and commission a means of gathering performance and operational data during the sea trials to evaluate the performance of the Flettner Rotors, allowing ship owners and operators to determine if Flettner Rotors are appropriate for their vessels. Matrix Bharat Launches Physical Operations in Mumbai Matrix Bharat (MBX), a joint venture between Singapore-based Matrix Marine Fuels and Bharat Petroleum Corporation Ltd. (BPCL) has started physical bunker supply operations to vessels at Mumbai’s outer port limits (OPL). BPCL) is one of India’s largest state owned oil refining and marketing companies. The Mumbai operation is supported BPCL storage and barge loading facilities on Jawahar Dweep, an island off the south-eastern coast of Mumbai. The company will service vessels that are waiting to berth, as well as vessels making bunker-onlycalls. MXB will use BPCL’s total tank storage capacity of 72,000 tonnes initially operating one tank storing 32,000 tonnes of fuel products, which is the largest in Mumbai. BPCL will also take responsibility for ensuring the highest standards in infrastructure, including storage tanks, product placing and pipeline delivery.

In March the ETI, in partnership with Norsepower Oy Ltd, Maersk Tankers and Shell Shipping & Maritime, announced that it will install and trial Flettner rotor sails onboard a Maersk Tankers-owned vessel.

The only official magazine of IBIA, World Bunkering autumn 2017

Five bunker barges, ranging in size from 650 tonnes to 1,200 tonnes, will support the physical operations in Mumbai. Bunker barge loading at Jawahar Dweep will take place from Berth No. 2, where the pipeline is fitted with marine loading arms, which enables MXB to connect to the barge manifold in just 30 minutes, and has a flow rate of 850 tonnes an hour. Bunker barge loading is also available 24 x 7 x 365, enabling MXB to undertake bunker deliveries in a shorter lead-time. Iraqi bunker operation set to start Al-Iraqia Shipping Services & Oil Trading (AISSOT), a joint-venture between Iraqi Oil Tankers Company (IOTC) and Arab Maritime Petroleum, plans to supply bunkers at Iraqi ports. According to reports it is expected that fuel will be supplied at Basra, Khor Al-Zubair and Umm Qasr. Mauritius update Shell has sold its stake in Vivo Energy, its franchisee covering sixteen markets across Africa, including Mauritius, to Vitol for US$250m. Vitol already held a 40% share in the company, which Shell said would retain its brand license in the long term. The oil major had been stepping back from direct involvement in Vivo since 2011 in line with its “strategy to concentrate its downstream operations where it can be most competitive”. At the same time, one of the island’s other players, Engen, has reported a tenfold increase in bunker sales there as a result of switching from 380 cSt offerings to 180 cSt. The lighter grade allowed the company to secure larger storage facilities and to be more competitive on price as the Mauritian market continues to develop. CORRECTION: In our section on Mauritius in the last issue, we inadvertently reported that bunkers were subject to an environmental levy and pipeline dues of US$11 and US$1.15 per tonne. Bunker fuel in Mauritius is exempt from these dues.

Flettner Rotors could play a part in reducing shipping’s CO2 footprint

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industry news

The Caspian Sea is a promising region with a great potential, and we plan to increase our presence in the area in the nearest future”.


BIO FUELS

BEYOND FAME – THE FUTURE IS... WASTE? Ever increasing pressure to address climate change will likely see a growing role for liquid fuels made from renewable sources. Unni Einemo looks at the sustainability of the alternatives

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he sixth edition of the ISO 8217 marine fuel standard took an important step to normalise the use of biofuels in bunkers by introducing a new table of distillate grades which allow up to 7% fatty acid methyl ester(s) (FAME) content by volume. There is resistance to this as fuels with FAME bring a range of handling issues, but it is in line with the maximum FAME content currently allowed in road diesel in most countries. The inclusion of biodiesel in road fuels has been actively encouraged for one purpose: to reduce greenhouse gas emissions. And since the Paris Agreement, the consensus is that the share of biofuels used in transport fuels will only grow. Responding to climate change is a priority at the International Maritime Organization as well. While concrete targets have yet to be agreed, the latest meeting of the IMO’s Marine Environment Protection Committee – featured elsewhere in this magazine - suggests IMO regulations will eventually push shipping toward carbon neutral fuels. So what are our options, and how viable and sustainable are they? Research and development is pointing to a number of renewable power sources that hold promise for shipping, such as fuel cells and batteries, and even going back to using wind.

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But what if we could replace the fossilbased liquid fuels of today with carbonneutral ones? Can the bunker suppliers of the future contribute to efforts to stem global warming and climate change?

drainage of peatlands, loss of biodiversity, as well as associated usage of freshwater, fertilisers and pesticides,” says a July 2017 report from the UK Royal Academy of Engineering.

The main power source for ships today, heavy fuel oil, is a by-product from the refining of crude oil. Ships’ huge diesel engines turn what is in many respects a waste product into power, and does it with fuel efficiency that beats pretty much all other types of engines. You could say this ability makes ships marvels of effective use of resources. But times are changing. Sulphur regulations are increasingly forcing ships to move away from HFO, unless they install abatement technology, and somewhere down the line, bunker fuels will need to be not only clean-burning, but also come from non-fossil sources.

The report called “Sustainability of liquid biofuels” says biofuels have a role to play in climate change mitigation and sees a continued role for biofuels from some agricultural feedstocks, particularly where it can be grown on marginal land that is unsuitable for food production. But socalled second generation biofuels made from wastes and by-products of other sectors are better. “These might include converting waste cooking oil, municipal solid waste, the dregs from whisky manufacture or even fatbergs - the bane of sewer management companies into useful fuel,” the report’s authors say.

But biofuels are not automatically a good thing. Their GHG credentials are not indisputable as it depends on how they are produced, and there are other sustainability issues. “While they have been enthusiastically adopted in some countries, notably Brazil, first generation biofuels manufactured from crops like corn have proved controversial. There have been concerns that increased demand for crops drives the conversion of land to agriculture, with the consequent risks of an increase in deforestation,

Professor Adisa Azapagic FREng, Chair of the Academy’s working group on biofuels, says: “Second generation biofuels offer real prospects for the UK to make progress in reducing emissions from transport, particularly in sectors like aviation where liquid fuels are really the only option for the foreseeable future. Our report shows that, with the right safeguards and monitoring, biofuels from waste in particular are well worth pursuing from a sustainability point of view and also provide business opportunities for development.”

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o perhaps the bunker fuels of the future will, like HFO today, continue to be based on wastes and by-products from other sectors. In fact, there is a product that is itself a by-product of FAME that could be a contender. FAME is created during the transesterification of vegetable oils and animal fats to make biodiesel. This process creates glycerol as a by-product. Glycerol appears to tick all the boxes for environmental performance, safety and technical feasibility to be used as a shipping fuel, but like with so many other alterative marine fuels, the commercial elements are lacking. Although production of glycerol exceeds demand in the sectors where it is normally used, namely in cosmetics, pharmaceuticals and food, there is not enough made globally to meet a significant share of demand from shipping, and the price isn’t right. But moves are afoot that could change this: it is possible to produce glycerol, which can be refined into glycerine fuel, from algae. Dunaliella salina, a type of algae that grows in saline waters, can have very high yields of glycerol, needing only sunlight to grow and absorbing CO2 in the process. A group based at the University of Greenwich are working on commercialising a bio-refinery based on these algae. Cultivation could take place in saline water ‘farms’ in arid places and hence not disturb eco-systems, not take up valuable arable land or put pressure on food or fresh water supplies. According to a British company called Aquafuel Research Ltd, the production of glycerine from salt water alga will be commercially demonstrated within the next three to four years.

BIO FUELS

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The project partners of the research group, Glycerine for Engines and Marine Sustainability (GLEAMS), analysed the fuel’s emissions profile, the technical and practical side of using it, safety, supply factors and economics. Apart from supply and the price of glycerine, all came up trumps. The project partners claimed that glycerine could be applied with minor modifications to existing ships, making retrofits reasonably priced. Surprisingly, once researches found a way to burn glycerine in a diesel engine (it is difficult to burn due to its high auto-ignition temperature and it has a high flash point of 160°C), it is said to burn significantly more efficiently than diesel. Moreover, it poses no major technical or operational challenges, and it has potentially no sulphur emissions. It is non-toxic (it is said to be so clean you can drink it and as already stated it is used in cosmetics); it is water soluble; and nearly impossible to ignite by accident. Hence it is both safe to handle and poses no environmental risk in the event of a spill. Aquafuel is currently providing glycerinefuelled generators producing electricity for Formula E, but there has been no further news on glycerine as a marine fuel since 2014. That may change as Paul Day, CEO of Aquafuel Research Ltd has confirmed to IBIA that the company is still interested in the marine sector and has “a potential project” in the area, and that work is continuing at Greenwich University to produce glycerol from algae.

The take up of biofuels in the shipping sector is currently very small. The main use so far has probably been by the US Navy, which was able to obtain government funds for research and development of advanced ‘drop-in’ 100% biofuels, widely seen as part of a bid for the US to be less dependent on oil imports. The container shipping giant Maersk has ran successful trials of biofuel blends, but these are not currently commercially viable. Projections in a study released by the Danish Shipowners Association in late 2016, looking at various scenarios for shipping to move toward decarbonisation, suggests biofuels could provide anything from 10% to about 35% of the total marine fuel supply in 2050. The study assumed no difference in price between biofuels and conventional marine fuels in the modelling, making availability the key parameter. That assumption doesn’t reflect the current reality, where the price of biofuels and other alternatives to conventional marine fuels remain key barriers to wider commercial usage in the marine sector. But if governments around the world take their commitments under the Paris Agreement seriously, incentives to increase production of sustainably sourced biofuels could make them both more widely available and commercially viable, including for the global marine transport sector.

Aquafuel was one of the key partners in a year-long project to examine the suitability of glycerine as an alternative fuel for the marine sector, which culminated with a practical demonstration of a marine generator using glycerine fuel in 2014. From the bathroom to the bunker tank, a new use for glycerine?

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LUBRICANTS

OOCL Hong Kong uses Shell lubricants

A busy scene

The lubes manufacturers are busy developing products that will meet needs of increasingly complex and diverse market

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s shipowners get to grips with the reality of switching fuels to comply with sulphur limit regulations, the lubricant industry is working flat out on new products. One product designed specifically to facilitate fuel switching when transiting in and out of Emission Control Areas (ECAs), without the need to change lubricants is Total Lubmarine’s Talusia Optima which has been developed for use with fuels with a sulphur content of between 0 - 3.5%. Total Lubmarine has now received a No Objection Letter from MAN Diesel & Turbo for the use of its cylinder lube oil, Talusia Optima, 100 BN in the engine manufacturer’s two-stroke engine designs. The move follows the completion of a successful 8,700 hour sea-trial and means that Talusia Optima is now approved by the three major 2-stroke engine manufacturers Winterthur Gas & Diesel (WinGD), Japan Engine Corporation (JEC) and MAN Diesel & Turbo. The sea-trials were completed on-board a modern 14,000 TEU containership powered by the latest generation fuelefficient 2-stroke 11S90ME-C mark 10.2 B&W engine, while sailing in and out of ECAs in Europe and regional emission control zones in Asia. The vessel sailed for more than 600 hours in ECAs powered by distillate fuels with a sulphur content of 0.1% and below.

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Total Lubmarine says that the lubricant is based on an innovative and new type of chemistry known as Ashfree Neutralizing Molecules (ANM) which provides effective acid neutralization, cylinder cleanliness and has the potential to reduce feed rates. “This was our longest ever trial of a new lube and provides both customers and OEMs with the reassurance that Talusia Optima can be safely used on-board vessels trading for lengthy periods in and out of ECAs,“ said Total Lubmarine’s Technical Director Jean-Philippe Roman. He added: The sea-trial and comprehensive validation tests were carried out using a combination of our already approved cylinder oils, Talusia LS 25 and Talusia Universal 100. This allowed for the inspection teams to compare and contrast the performance of the new Talusia Optima product. The results demonstrated the cleanliness of the engine when used with low and high sulphur fuels in and outside the ECAs, and the better efficiency to minimize the liner wear.’’ OOCL picks Shell solutions for largest boxship Major container carrier Orient Overseas Container Line (OOCL), one of the world’s largest integrated international container transportation, logistics and terminal companies, has appointed Shell Marine to provide its integrated marine solutions, which include lubricants and services for the OOCL Hong Kong. The 21,413 TEU vessel is currently the world’s largest container ship and is operating on Asia-Europe services.

Protecting, maintaining and optimising marine engine performance at a time when engine technology is fast developing can be challenging and complex, particularly during a period when fuel selection and vessel speed requirements are also up for discussion. The G-type engine design used in the OOCL Hong Kong requires close oil performance monitoring and technical support and since the containership also needs to optimise its performance by tackling very challenging operating conditions, this means that selecting high quality cylinder oil is of utmost importance. In addition to Shell Marine’s lubricants, Shell LubeMonitor has been deployed onboard OOCL Hong Kong – which includes a cylinder oil condition monitoring service that uses shipboard and laboratory analysis to help optimise engine performance and enable predictive maintenance. The programme includes access to Shell tools and expert advice to help customers strike and maintain an acceptable balance between feed rate related cylinder oil costs and wear-related cylinder maintenance expenses. It is now enhanced with a new software package, Marine Connect, designed to transfer on-board analysis data to the Shell experts easily and securely.

The only official magazine of IBIA, World Bunkering autumn 2017


Middle East Iran is still aiming to grow its bunker and petrochemical industry ©Babak Farrokhi

All eyes on the future

John Rickards reports a mood of optimism in the Middle East’s bunker industry despite a turbulent political scene and uncertainty over what will happen to the marine fuel market in 2020

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ll eyes in the Middle East, as well as a fair number of bets, are currently on the future. While the 2020 sulphur cap is looming on the horizon and there remain uncertainties in major trades and the oil market itself, ports, suppliers and operators across the region are betting on growth. That is despite the ongoing sanctions imposed by the UAE, Saudi Arabia and Egypt against Qatar. Backed by its vast gas wealth, Qatar is at the heart of one of the most sudden and serious diplomatic crises this side of the Gulf has seen, and trade, including the provision of fuel, has suffered. To alleviate the difficulties experienced by operators unable to refuel elsewhere, Qatar Petroleum announced a deal this summer in collaboration with WOQOD Marine to provide ship-to-ship fuel oil bunkering for all vessels calling at Qatari ports, based out of its Ras Laffan facility. Calling the move “a first, and important, step towards self-reliance”, Qatar Petroleum CEO Saad Sherida Al-Kaabi said, “This temporary ship-to-ship fuel bunkering facility will meet our clients’ safety and commercial expectations, and will continue until a permanent solution is implemented. Qatar Petroleum is fasttracking required studies and investments to provide independent, safe, and reliable bunkering capabilities.”

While Iran has endured some bumps of its own since its re-entry to the market following the end of sanctions - and supplying fuel oil to Western operators is reportedly still difficult due to the political environment - this summer has seen it continuing to eye the future. In June, the Port and Maritime Organisation of Iran announced it was investing IRR1.6 billion in three new docks at Shahid Rajaei Port to allow calls from tankers and products carriers of up to 100,000 dwt. The move, the PMO said, would increase the country’s annual petroleum products exports, 40% of which is fuel oil, to 34 million tonnes, and follows the inauguration of phase one of its new Qeshm bunkering facilities in January. The plan is for Qeshm to become a regional bunkering hub to rival Fujairah, 120 miles away, and while its first phase has a storage capacity of only 52,600 tonnes, the long term aim is to increase this to 750,000 tonnes by completion. Qeshm Star Bunkering is a joint venture between Islamic Republic of Iran Shipping Lines, National Iranian Tanker Company and Qeshm Free Zone Organization. At the first phase launch, IRISL managing director Dr Mohammad Saeedi said: “Thanks to the sanctions removal and the execution of JCPOA, seventeen major world shipping lines call regularly at Iranian ports.

The only official magazine of IBIA, World Bunkering autumn 2017

A golden opportunity has been provided for Islamic Republic of Iran to supply the necessary fuel for the vessels which travel in the Persian Gulf.” NITC meanwhile has inked a research deal with Iran’s Research Center of Petroleum Industry (RIPI) to develop new fuels to meet the demands of 2020. RIPI will assess “novel methods” for improving fuel quality and pollution profiles for both NITC’s ships and international customers, although it’s not clear at present whether this will involve fuel oil or distillates. NITC managing director Sirous Kian Ersi said: “Regarding the importance of the issue and the fact that not much [time] is left to the 2020 deadline, we decided to tap RIPI’s technological capabilities to cap sulphur content of marine fuel and promote its quality.” In Fujairah meanwhile, Abu Dhabi Ports has been handed a 35-year concession to operate and develop infrastructure at the hub. The deal includes deepening berths to 16.5m, building an approximate 300,000 square metre storage yard, and constructing an additional 1km quay to accommodate the expected growth in the number of ships arriving at the port.

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Abu Dhabi Ports CEO Captain Mohammed Jumaa Al Shamsi said: “The agreement has numerous mutual benefits, including the witnessing of significant growth in the Port of Fujairah in the coming years with the objective of being able to receive vessels of all sizes, in addition to an increase in freight operations, general cargo and passenger services.” Development work will start next year and the port will remain operational throughout. Additional capacity is expected to come online in 2021. To get a ground’s-eye view of the current market situation in the Gulf’s dominant bunker hub, World Bunkering spoke to Carsten Ladekjaer, CEO of the Glander International Bunkering Group, and Morten Langthjem, Sales Manager of the group’s Dubai arm, Glander International DMCC. WB: Oil prices continue to be depressed, despite OPEC attempts to support them since last year, and fuel prices with them.

With the region being so important at both the demand and production ends of the bunker sector, how has the company fared in what must have been a tricky market? ML: Without a doubt, we have seen the effect that the volatile crude market has had on the bunker industry; in the last one and half years, one metric tonne of RMG 380 cSt has been trading in the Fujairah market between US$130 and $350 per tonne. However the shifting market dynamics, in particular between Fujairah and Singapore, have proved to be beneficial to Glander International Bunkering. When Singapore pricing is lower than Fujairah, a shift in demand occurs, and vice versa. As a consequence, Glander International Bunkering, with operations in both regions, is able to provide multiple options for lifting bunkers to our customers who require flexible solutions. WB: With other Gulf states like Oman and Qatar pushing ahead with bunkering and port services expansions of their own,

Carsten Ladekjaer

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Iran attempting to modernise its own offerings, and the current tensions with Qatar, how is Dubai/Fujairah weathering the changes? ML: Of those ships affected by the sanctions and at present unable to source their bunkers in UAE waters, some have refuelled in Kuwait and Oman. Whether this is a short or long term shift, it is hard to predict. The issue in the UAE is that most physical suppliers are still committed to lifting cargo from ex-wharf sellers, despite the drop in volume. This has driven them to sell at discounted rates, thus depressing the market levels and affecting overall profitability. Some of the major players send part of their cargoes to more profitable markets, but the small and medium sized physicals are forced to sell with low margins just to turn their barges around. This practice is not sustainable, so we could face some downscaling in barge capacity.

Morten Langthjem

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WB: How do you see business progressing in the coming year? CL: I am relatively optimistic for the Glander International Bunkering group in general. Of course, we have seen and are still seeing an increasing level of competition in the market that has challenged our margins. This has been the general trend in the bunker industry since the oil prices declined severely back in 2014.

However, Glander International Bunkering is well positioned to operate in a highly competitive environment, this is due to several factors. Firstly, we have an organisation which is geared for constant change and are therefore quite agile and flexible. Secondly, we have always strived towards having a lean, fit and competitive cost base. And lastly, we have a team of very talented people, who are put through practical and educational development training. By growing our people to the best they can be, the brand is growing and prospering by default. Apart from this, when you look at the market in general, pressure still prevails on all involved stakeholders. It is a well-known fact that along with challenges come opportunities, at least if you have managed to place your organisation in the right position.

We have the right team and are continuously seeing more and more people who acknowledge this and who apply for a position with us. We have a sound and healthy financial base which is a must in this industry plus we are equipped with the expertise, professionalism and track record needed to add value to all our counter parties i.e. both on the selling and on the buying side. Finally, we draw on a safe and secure counterpart by having solid books and not having pledged our receivables to third parties. WB: With the blanket global 0.5% sulphur cap from 2020, do you think the window will give you time to adapt? With quality and certainty of specification - inevitably becoming more important when it hits, does the company’s track record in the market or relationship with producers give it an advantage?

I believe that Glander International Bunkering has succeeded in doing this in all organisational aspects.

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Middle East

Naturally we must not forget that Fujairah over the years has developed into what is now a dominant bunker port in the region. Although there are steps taken in Iran and Oman to upgrade infrastructure, we believe that no alternative setup could really impose a threat to Fujairah any time in the near future. Nevertheless, we at Glander International Bunkering are closely following the developments/ trends in the region so that we can inform our clients and let them take informed decisions.


Middle East

The diplomatic storm engulfing Qatar has forced its national oil company to provide stand-in bunker cover ©Erick Irani

CL: This is the new BIG question! I am old enough to remember similar concerns on the IT front back in 1999 when the world was preparing for the new millennium. Back then the concern was if all computers (and calendars within them) where ready for the change from ’99 to ’00.

Physical suppliers need to decide which sourcing and operational equipment they should opt for beyond 2020. Moreover, none of the before-mentioned decisions to be made are straightforward! Governments need to get ready to police, regulate and enforce the new regulation across the world.

There are certainly many aspects to consider in connection with IMO’s 2020 cap of 0.5% sulphur worldwide. Shipowners and operators need to decide which option they will go for on each individual vessel – i.e. scrubber, ULSFO, distillates or another alternative such as LNG, biodiesel, hybrid options etc.

Traders need to stay abreast of future availability, quality issues and they need to be ready to guide and consult their clients in all aspects of the repercussions of the IMO 2020.

Refiners will have to decide if they should make further investments into hydrocrackers, cookers etc. enabling them to produce more ULSFO and/or distillates.

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So no doubt this is surely a massive change for the industry and only time will tell what impact it will have both shortterm and long-term. My personal guess is that the shipping and bunkering sector will cope, albeit there will of course be hiccups, plenty of teething problems and probably also a number of offenders who will be tempted not to comply. Naturally loads of discussions are ongoing these days on the IMO 2020 cap across the shipping and bunkering sector worldwide but let’s not forget why the cap is implemented - namely to make a cleaner world for our children and grandchildren.

Again, for the right team and organisation this presents opportunities to add even more value. Furthermore, traders need to have their financial structure geared for the expected increase in demand for credit resulting from 2020.

The only official magazine of IBIA, World Bunkering autumn 2017


South East Asia MISC’s Eagle Virginia. The Malaysian company’s new tankers will be dual fuel

Interesting times As 2020 approaches the big players in South East Asia are preparing for major changes in the regional marine fuel market

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hange is inevitable but in South East Asia right now bunker industry insiders could be forgiven for thinking they are getting too much of good thing. And if that is the case now, just wait until 2020 when the global 0.50% sulphur in fuel cap comes into force. According to IBIA regional manager Asia, Simon Neo, South East Asia is “very interesting at this moment”. One reason for that is Chinese investment that is driving a number of major projects. One example is US$10 billion that has built the Myanmar-China Oil Pipeline, from western Myanmar to Kunming, China. The new pipeline will mean tankers do not need to pass the Straits of Malacca for cargo meant for import to Kunming or the south western part of China. This is expected to shorten the time to move Middle Eastern, West African and Caribbean crude to China by eight days, shaving off around 2,500 nautical miles. Chinese investment is also supporting projects in Malaysia, including oil terminals and port infrastructures, roads and rails across the west coast to the east coast of Malaysia. Meanwhile the need to prepare for 2020 is focusing minds, especially in Singapore and Malaysia. Plans for using LNG as a marine fuel are now well advanced but the reality of the global fleet suddenly switching to low sulphur fuels will require more immediate and generally applicable solutions.

At the same time new commercial and regulatory pressures are at play. Dramatic consolidation in the deep-sea container trades, especially affecting Asian players, has implications for bunker suppliers who now chase fewer bigger carriers. Meanwhile the switch to mass flow meters (MFM) in Singapore is another step change that the industry is having to learn to live with. Change creates opportunities and one obvious one is the expansion of bunkering on the Indonesian side of the Singapore Strait. Last year it was reported that Indonesian state-owned oil company Pertamina was setting up a new bunkering subsidiary Pertamina International Downstream Services, operating from newly upgraded terminals at Sambu Island, Batam, and Tanjung Uban, Bintan. Pertamina was looking to gain between 5% and 10% of the region’s bunker market, up from an estimated 1% now. However there have been no further announcements about the new subsidiary. Malaysia The prospect of much of the world fleet chasing the available stocks of low sulphur fuel has prompted one Malaysian company to enter the bunker business. Straits Inter Logistics, formerly known as Raya International, has until now mainly been involved in the distribution of industrial water filter components and in trading consumer goods. Now however it has acquired two small bunker tankers, the Sturgeon and Straits 1.

The only official magazine of IBIA, World Bunkering autumn 2017

In August Malaysian news agency Bernama reported that the company is optimistic of achieving a better performance for 2017 following its plan to diversify its principal activities into oil bunkering services, which is expected to be fully operational in the early fourth quarter of this year. Its executive director, Datuk Seri Ho Kam Choy, said that, with its two vessels the company would become “the only premium supplier of low-sulphur MGO in the country”. He was quoted as saying: “The oil bunkering business is a niche segment in marine logistics. We see strong growth potentials supported by high growth in global trade, driven by the e-economy and an increase in needs for marine transportation, as well as increased activities in the upstream oil and gas (O&G) industry. These are positive signs which complement our strategy to increase capabilities and footprint in the region.” He said that physical bunkering would make up 90% of the group’s business but it would also be involved in trading and the supply of oil products and services. Ho said the company already secured “a substantial number of clients”, mainly in the offshore support sector. He said the group would initially focus on bunkering operations from Pasir Gudang Port, Johor, and would later expand to Kemaman, Kuantan and Labuan. He said Straits Inter Logistics was likely to acquire further vessels next year.

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e also said due to Malaysia’s growing trade activities, the group would most likely acquire more vessels next year and also venture into the marine fuel oil service in the future. Meanwhile, on a much larger scale, Royal Vopak and its joint venture partners intend to expand their independent storage terminal, Pengerang Independent Terminals Sdn Bhd (PITSB) in Johor, by 430,000 cubic metres to a total capacity of 1.7 million cubic metres. The expansion, which Vopak says is subject to “final formalities”, is expected to be commissioned progressively from Q1 2019. PITSB can accommodate VLCCs. It provides storage, blending and distribution services for crude oil and clean petroleum products but the expansion relates to the storage of clean petroleum products. In total, 24 new tanks will be built ranging from 10,000 cubic metres to 25,000 cubic metres. In addition to the extra capacity, one extra berth will be taken into operation, bringing the total number of operating berths to six. This expansion of PITSB is aligned with Vopak’s strategy to invest in strategic hub locations. It said in a statement: “The growing need for new storage capacity for clean petroleum products is amongst others based on Asia’s growing structural need for gasoline and jet fuel as well as the growing need for low sulphur diesel/gasoil as a result of the global low sulphur requirement for shipping (active by 2020) as set by the International Maritime Organisation (IMO).” Minds in Malaysia are also being concentrated on the alternatives to either low sulphur fuels or residual fuel oil. The national oil company Petronas through its subsidiary Petronas LNG Ltd. (PLL) and its shipping affiliate, MISC inked a nonbinding Memorandum of Understanding (MoU) in May with Gas4Sea partners, comprising ENGIE S.A. (ENGIE), Mitsubishi Corporation (MC) and Nippon Yusen Kabushiki Kaisha (NYK) to explore potential collaboration in promoting LNG as the preferred marine fuel. Gas4Sea is a partnership created to jointly promote LNG as the cleaner marine fuel, by providing LNG bunkering services in the global market. Commenting on the MoU, PLL Chief Marketing Officer & Chief Executive Officer,

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Ezhar Yazid Jaafar said that the collaboration is expected to enhance PETRONAS’ strong presence in the integrated LNG value chain and diversified LNG market portfolio. He added: “Petronas is looking at ways to further promote the consumption of LNG beyond the existing markets portfolios, and advocating LNG as marine fuel is a new frontier for the LNG sector.” In fact Petronas, through MISC and its subsidiary tanker operator AET, is already well on the road to using LNG. In August it said that up to half of its fleet will be equipped with LNG dual-fuel options over the next few years. Four aframax newbuildings currently under construction will be dual fuel. Singapore Asked how the various developments in the region globally would affect Singapore, Neo stressed that the city state is one of Asia’s, and the world’s, major shipping, aviation and financial centres. That is why “ship owners, managers, cargo and oil traders, banks and many others position their companies in Singapore”. He said: “With a free, open and efficient port management, Singapore is the port of call for many vessels going to the East and also to the West. With a stable political environment, it is an ideal place to conduct business, especially for the marine industry. Singapore is the biggest bunker port in the world today and its volume has continued to grow during the first quarter of this year.” He pointed out that even though the local bunker industry has had to go through the big transition to using mass flow meters (MFM) and the shipping market “is not in a good shape”, bunker volumes still continued to grow by over 5.0% for the first four months of 2017. Underlining Neo’s view, Singapore has once again taken the top position in Norwegian consultancy firm Menon Economics’ Leading Maritime Capitals of the World Report. This is the third edition of the maritime report which also ranked Singapore first in 2015 and 2012. Making the use of MFM mandatory when delivering bunkers has generally gone smoothly but the Maritime and Port Authority of Singapore (MPA) recently found it necessary to crack down on a company found to breaking the rules.

Following checks made between January and March this year, the MPA announced in August that it had revoked Panoil Petroleum’s bunker craft operator licence, meaning it will no longer be allowed to operate as a bunker craft operator in Singapore. The MPA’s checks revealed that unauthorised alterations were made on board five bunker tankers operated by Panoil Petroleum. The unauthorised alterations were made on the pipelines of the bunker tankers between the Mass Flow Meters (MFM) and the flow boom. Such alterations allow bunker fuel that has been measured by the MFM to be siphoned out and undermine the accuracy of the readings from the MFM system. Meanwhile Singapore is also getting ready for LNG. MPA’s LNG bunkering pilot programme commenced early this year. In April Singapore LNG Corporation (SLNG) and MPA jointly launched the country’s first LNG Truck Loading Facility. Located within the SLNG Terminal on Jurong Island, the single-bay facility is being seen as an important first step towards developing LNG bunkering infrastructure. Also in April the first Singapore Technical Reference (TR) 56 for LNG Bunkering was launched by MPA, SPRING Singapore and the Standards Development Organisation @ Singapore Chemical Industry Council (SDO@SCIC). This standard is aimed at providing a safe, efficient, sustainable and transparent technical framework for conducting LNG bunkering operations in Singapore and as a consequence offering greater assurance to local and international LNG bunker buyers and suppliers. MPA is using TR 56 to guide the implementation of operational protocols by licensed LNG bunkering suppliers. Capt M Segar, MPA’s Assistant Chief Executive (Operations), said, “While it may take time for LNG to take off as a marine fuel globally, we have taken steps to kickstart LNG bunkering in Singapore through our LNG Bunkering Pilot Programme, one of them being the development of TR 56. The document will ensure Pavilion Gas and FueLNG, MPA’s two appointed LNG bunker supplier licensees, conduct LNG bunkering operations of high quality with regards to safety as well as quantity and quality assurance.”

The only official magazine of IBIA, World Bunkering autumn 2017


imo IMO

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MEPC 71 sets the scene for implementation of 2020 sulphur limit IMO meeting also approved new BDN, worked on GHG emissions, best practice for fuel users, ballast water and more, Unni Einemo reports

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f you think the International Maritime Organization may allow any form of delay to the implementation of the 0.50% sulphur limit, think again. Two proposals suggesting the IMO should consider transitional measures if data demonstrate significant difficulty in meeting demand for compliant fuels by 1 January 2020 were rejected by a majority of member states at the 71st session of the Marine Environment Protection Committee, which met at IMO’s London headquarters in the first week of July. IBIA, which proposed to MEPC 70 last year that the shift from a 3.50% to a 0.50% sulphur limit globally is of such a magnitude that a gradual transition would be better, accepts that IMO must stick firmly with the 2020 deadline, and told MEPC 71: “We must be careful now to ensure we are not moving the target as that would send the wrong signal and throw preparations into disarray. The target date is the only thing that we actually know and we must not sow any doubt about it if we are going to succeed with the implementation.”

IBIA and a large number of countries supported the idea in one of the proposals to obtain data on actual supply capacity, marine fuel demand and uptake of scrubbers closer to the implementation date, but the number of countries objecting to it was greater, mainly because they thought it may lead to uncertainty and potentially delay the preparation process. When IBIA supported data collection, our intention was clear: We do not want to call the implementation date into question. However, data would be helpful to monitor the situation and understand if there are any problems and then work on addressing them. There was, as expected, broad support to approve the so-called “new output” on “Consistent implementation of regulation 14.1.3 of MARPOL Annex VI” which was drafted by the Sub-Committee on Pollution Prevention and Response (PPR) in January 2017. In layman’s terms; it means MEPC agreed that work to ensure the global 0.50% sulphur cap in 2020 is successful will now be included in the PPR’s agenda, with a target completion year of 2019.

The only official magazine of IBIA, World Bunkering autumn 2017

The scope of this new agenda item includes references to considering the impact on fuel and machinery systems, verification of sulphur limits, and at the behest of the IMO’s Maritime Safety Committee, an explicit reference to look at any safety issues relating to blending of fuels to meet the 0.50% sulphur limit. With a majority opposing any further data collection and assessment ahead of 2020, MEPC 71 did not agree to add this to the scope. MEPC 71 supported a proposal submitted by a number of European Union countries to develop guidance to address the quality of 0.50% sulphur fuel blends. The document painted a very positive picture of the smooth introduction of the 0.10% sulphur limit for emission control areas (ECAs) in 2015, including experience with low sulphur fuel blends, but acknowledged that the scale of the 2020 shift to 0.50% is much larger. “The cosponsors expect these fuels to be blended close to or on the 0.50% m/m limit, driven by the economic considerations of blending,” the proposal said.

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hile making references to anticipated fuel blend quality issues, saying operators must be prepared to deal with more complex on-board fuel handling, the paper also said “there will be a greater expectation on suppliers having in place a robust and transparent supply chain assurance system, which adequately addresses all those factors that could affect the quality and sulphur content of the delivered fuel.” Commenting on the actual proposal in the paper, IBIA told MEPC 71: “We think this is a constructive proposal and we support the development of awareness documents and technical guidance to help all stakeholders understand the various aspects related to the implementation of the 0.50% sulphur limit regarding fuel quality and sulphur content. These will help all stakeholders with a practical and pragmatic approach to dealing with anticipated issues.” MEPC 71 agreed to forward the proposal to the next session of PPR for consideration as part of the work to ensure consistent implementation of the 2020 sulphur regime. It also agreed that PPR should take into account MEPC’s work on the development of best practice for fuel oil purchasers/users and Member States/coastal States. The purpose of these best practice guidelines is to ensure that ships receive fuel that complies with sulphur limits and is safe to use.

The co-coordinator of the Correspondence Group (CG) on fuel oil quality, which IBIA participates in, presented a draft guidance best practice for fuel oil purchasers/users to MEPC 71. Although further work was done on this draft, the resulting document still needs refinement and MEPC 71 decided to invite proposals to MEPC 72 to rework the best practice document with a view to agreeing on a final version at that session. As for best practice for Member State/ coastal State, the draft has not been sufficiently developed and work will continue in the CG on fuel oil quality. It was noted that this work would overlap with the work on consistent implementation of the 0.50% sulphur limit and, therefore, that further work on the best practice for Member State/ coastal State should be coordinated with these efforts. The aim is to have the best practice guidance in place before the 0.50% sulphur limit takes effect in 2020. Just how effective such best practice guidance for coastal States could be with regard to helping with the 2020 implementation is an open question. A paper submitted by China, India and Russia showed that while some 96% of the world fleet is flagged under states which are parties to MARPOL Annex VI, 63 out of 153 countries with a sea coast are not, and hence are under no obligation to enforce the regulation.

This raises concern that the 0.50% sulphur limit may not be robustly enforced. At present, 88 of 172 IMO Member States are parties to Annex VI of MARPOL. The three co-sponsors said more IMO Member States must sign up to ensure efficient implementation by both flag States and port States. The focus on enforcement of sulphur limits currently rests heavily on effective port state control measures, but if 63 countries with ports are under no obligation to enforce the 0.50% sulphur limit while 96% of ships are currently flagged in Annex VI signatory states, perhaps the IMO should investigate what flag states can do to contribute to effective implementation of the 2020 requirements. In summary, MEPC 71 reaffirmed the 2020 deadline and fired the starting gun for the work to ensure the regulation is successfully implemented. It could make for a heavy workload for the PPR sub-committee when trying to find solutions to the anticipated stumbling blocks. IBIA fights for sensible BDN New regulatory requirements regarding the information to be included in the bunker delivery note (BDN) will enter into force on 1 January 2019, after amendments to appendix V of MARPOL Annex VI were adopted. IBIA has been fighting for a sensible approach and put forward a paper to MEPC 71, explaining that several elements of the text up for adoption are problematic.

IMO

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imo IMO

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he newly adopted appendix V requires a declaration to be signed and certified by the fuel oil supplier’s representative that the fuel oil supplied is in conformity with regulation 18.3 of Annex VI and that the sulphur content of the fuel oil supplied does not exceed either the limit value given by regulation 14.1 of Annex VI (the global limit); the limit value given by regulation 14.4 of Annex VI (the ECA limit) or “the purchaser’s specified limit value” – indicating a tick box system covering these three cases. The third alternative has to filled in on the BDN by the fuel oil supplier’s representative “on the basis of purchaser’s notification” that the fuel oil is intended to be used either in combination with an equivalent means of compliance (i.e. with a scrubber) or that the ship is subject to a relevant exemption to conduct trials of sulphur emission reduction and control technology. The issues raised by IBIA were, in brief, that the conditions for providing fuel with a sulphur limit as specified by the purchaser do not take into account potential non-availability situations; creates confusion about the respective responsibility of suppliers and ships with regards to complying with MARPOL Annex V; and that the format lends itself to clerical errors. When introducing the paper at MEPC 71, IBIA asked the Committee to consider three separate issues before adopting the amendments: “Firstly, the incompatibility of the new text with non-availability situations which we must prepare to deal with after the 1st of January 2020, secondly the fact that the text asks the supplier’s representative to declare something only the ship’s representative can actually vouch for, and thirdly, that we should endeavour to make the text clearer by adding the sulphur limits associated with regulation 14.1 and 14.4 next to the relevant tick boxes.”

While there was some support for IBIA’s views and proposals for improving the text in appendix V, it was rejected by a majority. However, following the report from the drafting group tasked with providing the final text for adoption, IBIA was able to get clarifications which mean most of the concerns we raised can be addressed. The drafting group’s report stated that “whilst the format of the information provided, notably the checkboxes, gave the impression that this should be used as a template of the declaration, the Group recognized that this was not the case.” As the drafting group report and final text for adoption was presented to the Committee in plenary, IBIA asked: “Will the BDN need to specify that the supplier was notified that the vessel supplied has abatement technology or has an exemption to trial such technology? And will there be a requirement to specify which one of these notifications the purchaser provided?” This had not been considered by the drafting group; however a clarification was offered in plenary that was considered and agreed by the Committee, as follows: If it had been intended that the two specific sub-points after the third tick box were to be included in the BDN format, there would have been a tick box against them, and that is not the case. As such, the third tick box only requires that the sulphur value specified by the purchaser is entered. There is no requirement for validation by the supplier on the BDN as to which method of compliance is used by the ship. Validation will exist onboard the ship. Following this, IBIA has offered suggestions to those of its members that need to provide BDNs on how they can make the text as clear and error-proof as possible, especially if using tick boxes.

The only official magazine of IBIA, World Bunkering autumn 2017

If a purchaser specifies a sulphur limit value that is not covered by the first two tick boxes, seeing as the regulatory text says this should be provided on the basis of the purchaser’s notification regarding how the fuel oil is intended to be used, IBIA recommends that the supplier (or the supplier’s representative) should obtains such notification in a format that they can keep a copy of for their own records, but does not recommend including specific information regarding the ship’s intended use of the fuel on the BDN. Overall the outcome was better than expected as it is now clear the text in appendix V of MARPOL Annex VI is not a template and as such can be improved to make the text on the BDN itself clearer, more userfriendly and less prone to unintentional incorrect information. Reducing GHG from shipping IMO had not just one, but two weeks of detailed discussions about how to respond to the Paris Agreement, as MEPC 71 was preceded by a week-long meeting of the Intersessional Working Group on Reduction of GHG Emissions from Ships (ISWG-GHG). The result, after two weeks of deliberations and position statements, was modest, producing only agreement on a draft outline for the structure of the initial IMO strategy to be agreed in 2018. This is part of the IMO’s agreed ‘roadmap’ for its strategy to control greenhouse gas emissions from international shipping, intended to produce a more fully formed revised strategy in 2023. Getting there won’t be easy as it will require finding a way to reconcile two seemingly mutually exclusive principles, namely the Common but Differentiated Responsibilities for developing and developed countries, and the IMO’s principle of no more favourable treatment because IMO regulations must apply equally to ships of all flags to be effective.

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ut don’t be fooled into thinking the IMO won’t deliver a framework to set shipping on a pathway to decarbonisation in the second half of the century. Although discussions remain at a high level for now, a few signals are emerging about what we may expect. It is clear that shipping will be expected to play a part in helping to realise the goal of the Paris Agreement to keep the global average increase in temperatures below 2 and preferably to no more than 1.5°C. Initial work at the IMO to reduce GHG emissions from shipping will build on the existing legal framework to enhance energy efficiency, but longer term the IMO needs to pursue the development of zero-carbon or fossil free fuels. In addition to CO2, there seems to be growing consensus to include emission of methane associated with LNG and also volatile organic compounds (VOCs) from ship’s cargo in a definition of GHG emissions from shipping. Many also want to include black carbon; which is known as a strong climate forcer, but this looks unlikely because it is not a gas. A new study presented to the ISWGGHG and MEPC 71, using the same methodology as the Third IMO GHG Study 2014, showed that shipping transport work has grown markedly slower than in previous years and hence it showed significantly lower projections for maritime GHG emission projections under the business as usual emission estimates for the period 2012 to 2050 than the Third IMO GHG Study. This raised quite a few eyebrows and discussion about making decisions based on accurate data. Indeed, the IMO will have a battle on its hands to agree on quantified ambition levels in 2018 because many think any ambitions or targets must be evidence-based and there won’t be reliable data by then, as the IMO’s mandatory ship fuel consumption data collection only starts in 2019.

as well as additional specified data, including proxies for transport work. MEPC 71 adopted guidelines for Administration verification of ship fuel oil consumption data to support the implementation of Regulation 22A, as well as guidelines for the development and management of the IMO Ship Fuel Oil Consumption Database. Discussions continued at MEPC 71 with regards to MARPOL Annex VI regulations that took effect in 2013, requiring new ships to be built to increasingly tight energy efficiency standards. Last year, MEPC 70 decided not to change phase 2 of the Energy Efficiency Design Index (EEDI), but to consider introducing phase 3 sooner and add a phase 4 with more stringent requirements. Work on this will continue in a correspondence group which will report on progress by MEPC 72 and make a recommendation to MEPC 73 – due to be held in late 2018 - on the time period and reduction rates for EEDI phase 3 requirements. MEPC 71 discussed a study and proposal submitted by the Clean Shipping Coalition in support of tightening the EEDI requirements sooner because many new ships already meet phase 3 requirements, but decided that the Estimated Index Value (EIV) used in the study is substantially different from the EEDI; hence a comparative study is misleading. Ballast water compromise Any vessel with ballast water operating in the waters of more than one country will need to comply with the Ballast Water Management Convention (BWM Convention) entering into force on 8 September 2017,

but the industry has been given a twoyear extension on the requirement to meet the regulatory standard for ballast water discharges (D-2) on existing ships. The D-2 standard specifies levels of viable organisms left in the water after treatment. A compromise was struck at MEPC 71 to permit the delay by agreeing on amendments to regulation B-3 of the BWM Convention, which sets out an implementation plan with dates for when ships must have ballast water treatment systems (BWTS) meeting the D-2 treatment standards, with a view to adoption at MEPC 72. The implementation plan is linked to the date of a ship’s International Oil Pollution Prevention (IOPP) renewal survey, which is required under MARPOL Annex I. The idea is that all ships won’t do the IOPP renewal survey at the same time and hence avoid bottlenecks at yards as ships go into dry-dock to install BWTS. In practice, the majority of existing ships will be required to install BWTS at their first IOPP renewal survey on or after 8 September 2019, but before 2024. The extension has been welcomed by shipping industry associations, but may not be of much use for ships that are intended to be able to trade to the US, as the US has its own, more stringent BWM standards. In other developments, MEPC 71 agreed on amendments to Guidelines for risk assessment under regulation A-4 of the BWM Convention (G7) to introduce the same risk area (SRA) concept. The SRA concept allows States to agree on granting exemptions from the BWM Convention requirements for vessels operating in the waters of more than one State but within a specified area agreed between States.

The framework for the IMO’s fuel use data collection under the new Regulation 22A under chapter 4 of annex VI of MARPOL, is taking shape. It makes it mandatory for ships of 5,000 gross tonnage and above to collect consumption data for each type of fuel oil they use,

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The only official magazine of IBIA, World Bunkering autumn 2017


Innovation

Wind and solar sail combination progresses Aquarius Marine Renewable Energy solution will undergo sea trials next year

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apan-based Eco Marine Power (EMP) has begun preparing for sea trials of its Aquarius Marine Renewable Energy (MRE) solution in co-operation with strategic partners and Onomichi-based shipowner Hisafuku. This preparatory work is intended lead to the world’s first installation of an integrated rigid sail and solar power system for ships using EMP’s patented technologies including the EnergySail. EMP says: “This is a major step forward towards a more sustainable future for shipping and is expected to result in the wider deployment of EMP’s solutions on ships ranging from coastal cargo vessels to bulk ore carriers and cruise ships.” A feasibility study involving several large bulk carriers: Belgrano, Nord Gemini and Bulk Chile, is already underway. For each ship an estimate of the propulsive power that could be provided by an EnergySail array will be prepared according to the routes they operate on. In addition the total amount of solar power that could be installed on each vessel will be determined. On-board testing and data collection will also be undertaken as required.

After the feasibility study is completed, one ship will be selected for the sea trials phase. During this phase a trial configuration that will incorporate all the elements of Aquarius MRE will be installed and evaluated during a period of approximately 12 to 18 months.

Over the past year, the seven 50,000 dead weight tonne methanol tankers – powered by two-stroke dual-fuel engines capable of running on methanol, fuel oil, marine diesel oil or gas oil – have been operating safely and reliably across the globe.”

Strategic partners involved in the Aquarius MRE Project include KEI System Co, The Furukawa Battery Company and Teramoto Iron Works Co. EMP is also in discussions with several companies including potential investors about their possible involvement in the project. Furthermore EMP is interested in hearing from other companies that may wish to be involved during the sea trials phase of the project.

Jone Hognestad, former President of Waterfront Shipping, who retired in March this year, said: “It has been exciting working with our shipping partners over the last few years to advance this new, clean technology.” He went on: “Investing in methanol-based marine fuel is an important step in the right direction and reinforces our commitment to sustainable proven technology that provides environmental benefits and meets emission regulations. In 2012, we were looking to renew part of our fleet as time charter vessel contracts naturally expired and to add new vessels to the fleet to meet increased product transportation needs. As an innovative and leading global marine transportation company and a wholly owned subsidiary of Methanex Corporation, the world’s largest producer and supplier of methanol, it was only natural that we investigated methanol as a future fuel for our vessels”, stated Hognestad.

Methanol-fuelled fleet chalks up first year Waterfront Shipping (WFS) marked one year of operation of the first of its seven vessels capable of running on methanol into its fleet in April. The first three vessels were delivered in April and the remaining four later in 2016. WFS says: “These innovative vessels have achieved accolades from the marine industry for their use of clean-burning methanol as an alternative marine fuel.

The only official magazine of IBIA, World Bunkering autumn 2017

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FS invited three shipping companies: Marinvest/Skagerack Invest (Marinvest), Mitsui O.S.K. Lines, Ltd. (MOL), and Westfal-Larsen Management (WL), to collaborate on the project and in December 2013 announced plans to commission these dual-fuel vessels. Shipping partners, the engine manufacturer MAN Diesel and Turbo SE, and the two shipyards building the vessels, Hyundai Mipo Dockyard in Korea and Minaminippon in Japan worked closely to bring this innovative commitment to life. Since then, it has demonstrated and verified the potential to move the shipping industry forward.

and the simplicity of the engine design and ship technology. Methanol shares similar characteristics with other marine fuels with respect to storage and handling and can even be bunkered by trucks if required. Using methanol as a marine fuel is a feasible and practical solution that supports the shipping industry and regulatory requirements. With the recent announcement by IMO for a global 0.5% sulphur cap for vessels worldwide effective 2020, methanol will soon be one of the very few fuel alternatives to MGO that can be utilized by existing modern vessels after relatively minor and cost effective retro-fit modifications compared to, for instance, LNG.”

Westfal-Larsen Management’s CEO Rolf Westfal-Larsen Jr said: “As we were evaluating our investment in this technology and having the Leikanger and Lindanger built with an engine that can run on a fuel such as methanol, it was important that we assessed its adaptability and use. Now with our vessels in operation and in the waters, we have found methanol to be one of the best alternative fuels due to its wide availability, the use of existing infrastructure,

Low flashpoint booster systems adapted for LPG Global heat transfer, separation and fluid handling solutions provider Alfa Laval says its FCM One Low-Flashpoint (LF) booster systems have been a “clear success” on methanol-fuelled tankers with ME-LGI engines. Now Alfa Laval is supporting MAN Diesel & Turbo as the engine series is further developed to work with LPG.

In late 2013, Alfa Laval was selected by MAN Diesel & Turbo to deliver LowFlashpoint Supply Systems (LFSS) for the world’s first methanol-fuelled tankers. Since 2012, the two companies had been collaborating broadly on fuel conditioning for MAN Diesel & Turbo’s new twostroke diesel engines with Liquefied Gas Injection (LGI) technology. But when the engine maker contracted to equip nine vessels with methanol-burning ME-LGI engines, methanol came quickly into focus. “MAN Diesel & Turbo has worked closely with Alfa Laval in development projects like Exhaust Gas Recirculation, where Alfa Laval PureNOx technology cleans the circulation water,” says Søren H. Jensen, Vice President and Head of R&D, TwoStroke Business at MAN Diesel & Turbo. “That, together with deep expertise in fuel conditioning, made Alfa Laval the natural choice to deliver the LowFlashpoint Supply Systems for methanol.”

MAN Diesel & Turbo delivered low flashpoint supply systems for the world’s first methanol-fuelled tankers

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The only official magazine of IBIA, World Bunkering autumn 2017


he resulting booster technology, the Alfa Laval FCM One Low-Flashpoint (LF), was installed on tankers built at Minaminippon in Japan and Hyundai Mipo Dockyard in Korea. The vessels’ three owners, MOL, Westfal-Larsen and Marinvest, have since logged over 4500 running hours with the FCM One LF in the past three years. In follow-on developments, MAN Diesel & Turbo is currently modifying the ME-LGI engine series to use LPG as an alternative fuel, and Alfa Laval is also preparing the booster system. “Tests of the engine and booster are expected to be completed by the end of 2017,” said Roberto Comelli, Business Manager, Fuel Conditioning Systems at Alfa Laval. “In the meantime, Alfa Laval is preparing to support MAN Diesel & Turbo when the first LPG-related orders come in. We are proud to be associated with LGI engine technology and to help bring more customers access to this low-emission alternative.”

Next generation energy management system from Rolls-Royce Rolls-Royce has launched the next generation of its Energy Management (EM) System. The system will allow customers to reduce energy usage, fuel consumption and operating costs whilst supporting environmental compliance and providing performance information that enables the ship to comply with IMO regulations such as the mandatory Ship Energy Efficiency Management Plan (SEEMP). The manufacturer says the system offers customers a more data-driven performance management and decision making approach which will give an enhanced ability to monitor the performance of an individual vessel or a fleet. It can also increase crew awareness of individual ship performance and encourage healthy vessel-tovessel benchmarking and competition, improving the performance of a specific vessel through the propagation of best operating practice

According to Rolls-Royce, the system can be easily retrofitted and is also customisable to meet specific customer needs. It is suitable for a wide range of vessels, particularly those using large quantities of fuel, for example ferries, cruise and ropax ships, offshore vessels, fishing vessels and cargo ships. The Energy Management System collects and processes data from a multitude of sensors on the vessel. Data sources include the engines, propulsion system, automation, deck machinery and other equipment. The data collected from frequent sampling is available on board and is securely encrypted before being transmitted via link on to a secure Rolls-Royce-hosted web portal, where much more detailed analysis and comparisons can be carried out. A cloud-based portal enables fleet operators to compare real-time and historical performance indicators and baseline analysis. Selected information is displayed graphically to make it as accessible and easy to use as possible. New additive tested Additive manufacturer Innospec tested its new Octamar Complete at Shell Marine & Power Innovation Centre (MPIC) in Hamburg, Germany, recently. The product tests were conducted on a test-bed engine and under controlled conditions, using 380 cSt fuel. Innopsec says Octamar Complete provides a “true tank-to-stack product and gives unrivalled performance in handling and combusting today’s residual marine fuel qualities.” The company says that the tests demonstrated the ability of Octamar Complete “to provide meaningful and measurable improvements in specific fuel oil consumption (SFOC), reduced particulate emissions, improved fuel stability and ignition and combustion”. An average reduction in SFOC of 1.6% across the load range was noted by Innospec, applying normalisation as per ISO standards and statistical analysis of the raw data using the Wilcox on Matched Pairs Test. At 50% engine load, a maximum SFOC reduction of 2.2% was achieved.

The only official magazine of IBIA, World Bunkering autumn 2017

High hopes for sulphur removal machine as alternative to scrubbers A small US-based technology company has developed a machine, De-Sul, which it says can be used on ships to turn high sulphur heavy fuel oil (HSFO) into a product complying with the upcoming 0.50% sulphur limit. Green Framework claims De-Sul is an inline fuel grooming device which removes almost all the sulphur from HSFO bunker fuels, with a minimum of complication and power requirement, saying it can be fitted in a matter of days. Green Framework believes the machine, which weighs about 5 tonne and is said to have a small footprint and a power requirement of approximately 50kw, could be a “ground breaking solution” in efforts to meet the 2020 sulphur limit, offering a lower cost alternative to scrubbers.Company CEO Barbara Dutton-Weingarten says De-Sul grooms the fuel at a molecular level. Bunkers are then passed through a filtration system to remove the sulphur-carrying compounds before the clean fuel is delivered to the day tanks. The company envisages that the heavy materials that are filtered out after grooming can be stored on the ship. This post processing residue would be a pumpable heavy sludge which can be returned to shore for further processing into elemental sulphur, recovered fuel and other saleable compounds, according to Green Framework. The company is currently looking for distribution and development partners to bring the product to the wider shipping market. If De-Sul is proven to work in practice, and ship owners are convinced that the by-product of the fuel processing can be safely and conveniently stored on the ship and later discharged ashore, it could become an interesting alternative for compliance with the global sulphur cap.

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Innovation

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Russia

News from Russia Our regular round-up of the Russian bunker scene by Olga Bogacheva

Russian bunker market still beset with problems Russian bunker companies were again forced to address negative trends at their annual forum in St. Petersburg recently. Their combined share of the global bunker market was only 2.7 %. Bunker sales in the first five months of this year totalled 11 million tonnes, down 26% compared with the same period in 2016. This decline is continuing. The only exception is the Far Eastern region, where the market grew by 27% in the first five month but this follows an unprecedented collapse in sales, of 44%, last year. The reasons for such abrupt changes in fortune are not economic. The Russian media has repeatedly described the serious administrative pressure on the bunker business from port and customs authorities. These pressures have been partially resisted through coordinated actions by companies and their representative, the Russian Association of Marine and River Bunker Suppliers. While bunker volumes fall, traffic though Russia’s ports is continuing to grow, at 7% year-on-year. The bunker companies say buying fuel in Russia has become less attractive, mainly because prices in Russia are now similar to those at competing European, Asian and American ports. However overbearing bureaucracy is a factor. Some experts also point to the absence of LNG as adversely affectingdemand. Russia’s Baltic suppliers adapting to ULSFO MARPOL restrictions introduced in 2015 was the key driver behind a significant new development, namely the emergence of a new product, ULSFO fuel, according to Gazpromneft Marine Bunker analysts speaking at the forum. Currently, according to the company’s Anastasia Kazieva, the share of ULSFO in the Baltic Sea is 17%. Sales of regular heavy fuels, or intermediate fuel oils (IFO) in the Baltic are down about 30%.

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2014

2016

IFO

89%

60%

MGO

11%

23%

ULSFO.

-

17%

Changes in market share according to Gazpromneft Gazpromneft noted that ULSFO refers to the so-called hybrid marine fuels which combine the properties of both heavy fuel and distillates and are fully compliant with the 0.10% MARPOL sulphur limit applying in emission control areas. The key advantage of hybrid fuels is their reasonable price which allows reducing the operating costs in the ECA area. Lukoil was the innovator in this sector in Russia after commencing production of RMD 80 with the required sulphur level. Gazpromneft Marine Bunker followed soon after, selling 180,000 tonnes of the new fuel in 2015. At the same time, the number of smaller suppliers in the market has been increasing as the demand for the new product grows. According to speakers at the forum, even though the current MGO price is attractive due to the decline of oil prices, ULSFO continues to be a profitable product, especially when this type of bunker fuel is supplied in stems of between 1,000 and 1,500 tonnes. On average, ULSFO is $50 per tonne cheaper than MGO in Russian ports and $20 per tonne cheaper in Europe. Using ULSFO over the past years has enabled suppliers and consumers to gain substantial experience in working with the new fuel. Issues including compatibility, storage and handling have ceased to be barriers to its wide application. Kaziyeva presented Gazpromneft’s Marine Bunker forecast until 2025 and assured the forum participants that there would be no problems with availability of fuel of the required quality.

Russia and the global market after 2020 Dmitry Terentiev, Argus Media’s business development manager, outlined Russia’s prospects in the global bunker market. His forecast was that global bunker fuel demand in 2020 would be about 200 million tonnes with half being for gasoil to comply with the sulphur in fuel limits. He said: “We assume compliant vessels would work out at around 25 million tonnes of IFO demand. Once IMO global sulphur cap comes in 2020, shipowners would try to dodge it when they are in international waters. About 45 million tonnes of fuel oil could be used by vessels with installed exhaust scrubbers. Another 25 million tonnes is assumed to be used in the form of low-sulphur heavy bunkers. So about 100 million tonnes of IFO have to be displaced in the market. Only 50% of this additional gasoil amount is obviously available.” The price-spread between gasoil and fuel oil would be about $70-75 per barrel come 2020, Terentiev said. The spread would be a powerful incentive to do two things. It would speed up refinery upgrading because new coking and hydrocracking plants would be extremely profitable. Also it would stimulate ship owners to accelerate the pace of investment in scrubbing. Terentiev added that because Brazil and Argentina process low-sulphur crude, their bunkers are automatically lowsulphur. These two countries are very well positioned to meet the 2020 regulations without serious effort. Because of this we will probably see bunker fuel demand in Argentina and Brazil gaining in 2020. He said that LNG and other alternative bunker fuel projects are developing slowly and are not expected to gain significant share in the global bunker market. Modernisation of Russian refineries will lead to gasoil production growth. Tax manoeuvres encourage producers to export clean products rather than dirty products. Gasoil production in Russia will grow by 20% in 2020, while Russian producers will decrease fuel oil output by 30% in 2020. Russian gasoil export will grow and fuel oil supplies are expected to decrease significantly.

The only official magazine of IBIA, World Bunkering autumn 2017


Russia

Rosneft-Bunker launches 0.10% sulphur cap compliant fuel Rosneft subsidiary PH-Bunker has started production of its TSM-A marine fuel with sulphur content of less than 0.10%. This low-sulphur, low viscosity fuel is produced at its Ufa refinery. The first batches of the product were shipped recently to Kavkaz, Rostov-onDon, St. Petersburg and Kaliningrad ports. Marine fuels with sulphur content below 0.10% are also produced at the Ryazan and Komsomolsk refineries of Rosneft group. RN-Bunker delivered about 200,000 tonnes of low sulphur fuel in 2016. RN-Bunker is the largest supplier of marine fuel in the Russian market. Outside Moscow, the company has offices in key regions of the country: Nakhodka, Vladivostok, South Sakhalinsk, Arkhangelsk, Murmansk, St. Petersburg, Novorossiysk, Tuapse, Samara.

Gazpromneft-Lubricants opens in Far East Gazpromneft-Lubricants has opened a lubricant supply office in Vladivostok. The company already supplies fuel oil at the Far-Eastern ports of Vladivostok, Vostochny, Nakhodka, Kholmsk, Korsakov, Petropavlovsk-Kamchatka, Shakhtyorsk, Olga, Posyet and Vanino. Last year the company sold 4,714 tonnes of motor lubricants at regional ports, a 51.8% increase on 2015. The Gazpromneft subsidiary of Gazprom Neft was established in November 2007 and has six production sites in Russia, Italy and Serbia. Total annual output of lubricants and specialist oil is about 500,000 tonnes. The company supplies lubricant to Sovcomflot, Rosmorport, Rosnefteflot, Norilsk Nickel vessels and other Russian and foreign ship-owners. It uses the Chevron global supply network in more than 800 ports around the world. Gazpromneft-Lubricants accounts for 15% of the Russian lubricant market.

Vladivostok LNG bunkers project revived After appearing to stall, a project to produce LNG, including as marine fuel, at Vladivostok may now go ahead. Kommersant Daily reported that Gazprom head Alexei Miller said the Vladivostok LNG project would be revived. Originally the first stage of the plant, with an annual capacity of 10 million tonnes, was to be completed by 2019, with full capacity of 15 million tonnes to be achieved within two years. It was intended that much of Vladivostok LNG’s production would be sold in the AsiaPacific area. But at the end of 2014 doubts were raised about feasibility of the project, primarily because of the imposition of sanctions against Gazprombank. In addition, the LNG market also experienced a decline. However, in July, the head of Gazprom stated that work had started on the project. “The reason is the growth of the Asia-Pacific demand for gas fuel, particularly for the bunker fuel. We see a very high demand and interest of certain foreign companies which are willing to participate in this project with the understanding that the focus would be on bunkering,” Kommersant quotes him as saying. It appears the plant will be smaller than originally planned.

New bunker terminal at Vanino Far-Eastern-based company Forum DV is building a shore-based terminal for bunkering ships using road tankers at Vanino. Annual capacity has been put at 150,000 tonnes. The objective is to eliminate a shortage bunkering facilities for tankers calling at the port. . After the project was approved, the company was granted official status as a resident of the free port of Vanino. The bunker terminal is a part of a large-scale project focused on expansion of Far-Eastern ports. The Vanino infrastructure project is scheduled to be built from 2018 to 2021 by a public-private partnership between Rosmorport and transport company Saha (Yakut) Ltd, part of Gennadiy Timchenko’s Volga Group. The project includes two coal loading berths, a bulk cargo complex and a railway connection. Total investment in the project is estimated at 25.5 billion rubles (US$430 million) with public funds contributing 1.1 billion rubles.

Bronka may become a free port The Government of St. Petersburg is considering the possibility of establishing a port special economic zone at the port of Bronka, which is part of the wider port of St. Petersburg. However this is unlikely to happen in the near future as a new law on free ports within the Russian Federation, initiated by the Ministry of Transport, is still under discussion. Russia’s free ports benefit from state support for entrepreneurial activity as well as preferential tax regimes and simplified customs procedures.

The only official magazine of IBIA, World Bunkering autumn 2017

Dmitry Terentiev

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Russia

Russia set to boost LNG projects Russia is a major world natural gas supplier but Russia’s projects involving LNG’s use as a fuel for the transport sector have been progressing rather slowly . The situation should change soon

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he Russian government has established a special state programme to boost the use of LNG. This has now resulted in a report. Svetlana Vorontsova, first vice president of Transport Integration Group, one of the report’s writers, answers Olga Bogacheva’s questions. OB: What is the reason for the state programme? Who has designed it and for what purpose? SV: The official title of the programme is “Increasing of Use of Natural Gas as a Motor Fuel in Transport and Special-Purpose Equipment”. As the title implies, its main objective is to accelerate and intensify transition of all transport to cheaper and more environmentally friendly fuels. At the same time, it provides funding for key gas supplying infrastructure, business incentives, and, importantly, synchronizing the activities of all participants and operators. OB: What are the government’s intentions? Is the construction of specialised vessels, terminals, etc. envisaged? Do you have any specific data? SV: Sea and river transport are priorities when it comes to using LNG because the potential market size is large and the positive environmental impact is high.

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LNG-fuel supplies to marine vessels in Russian seaports can bring serious income to the bunker market. Besides, it’s no secret the Russian fleet is old and worn out. At present, about 45% of vessels are aged between 20 and 30 years and some 33.6% are older than 30 years. In other words, more than half of the fleet should be replaced by new ships. And this could bring significant benefits to shipping companies. They may “leap over the step” using the latest and most advanced technical solutions. It is reasonable to transfer icebreakers, tugs, LNG-suppliers, sea-river vessels, river passenger vessels, and ferries to LNG fuel. Currently there is a lot of natural gas in the Russian Federation, but there is no coastal infrastructure for supply and storage of LNG, no bunkering tankers, no stations for servicing LNG-powered vessels, and no qualified personnel with the skills to do so. The state programme is focused on the actual solution of these problems. The federal budget will provide finances for design and construction of LNGvessels for public enterprises, such as port administrations.

There also will be measures to encourage shipowners to buy LNG-powered vessels and participate in development of appropriate infrastructure. Universities will begin to train specialists in new programmes. Several major projects are already at different stages of discussion and implementation. Construction of an underground storage, with capacity of 52 million cubic metres started in Kaliningrad in 2013. Hyundai Heavy Industries will complete construction of a floating regasification terminal ordered by Gazprom in November 2017 to supply gas to the Kaliningrad region through a fixed sea terminal. It is planned to build a car-and-passenger LNG-powered ferry for the Kaliningrad-St. Petersburg line by 2022. Baltic LNG, an LNG producing plant, with annual capacity of 10 million, is planned to be built at the port of Ust-Luga. Possibility of its expansion to 15 million tonnes per year is reserved.

The only official magazine of IBIA, World Bunkering autumn 2017


Russia

P

rivate investors are considering various options for the placement of LNG bunkering bases in the Russian ports of the Baltic Sea (Ust-Luga, St. Petersburg, Vyborg and others), which will be selected after development and approval of the project documents. Gazprom has ordered a feasibility study to back investment in the construction of the LNG plant in the Black Sea area and for further selection of Black Sea ports to accommodate the bunkering bases. United Shipbuilding Corporation has completed construction of the world’s first icebreaker, powered by LNG. The icebreaker was commissioned by the Finnish Transport Agency at the Arctech Helsinki Shipyard owned by the USC. The first production line of an LNG plant and the port for dispatch of LNG and gas condensate has been completed in Sabetta village on the eastern shore of the Yamal peninsula. In the future LNG-powered tankers and tugboat will possibly deliver gas condensate from Sabetta port.

The river fleet will consume natural gas in spring and autumn, when there is a decline in seasonal gas demand by other sectors of the country’s economy. Taking gas consumption in other industries into account will enable us to improve the efficiency of the fuel supply system. It is projected that expansion of LNG use as bunker fuel for water transport will reach 120,000 tonnes by 2022, taking into account the potential size of the sea and river LNG-powered vessels. OB: We are aware many ways of encouraging the transition to LNG are being applied in Europe and North America. There are well documented benefits and guarantees for the market players. What is planned in Russia in this respect? SV: The following mechanisms are considered for facilitating the transition of vessels to LNG fuel:

An LNG bunkering terminal is planned to be built in Vladivostok (the Vladivostok LNG Project) in the Far East.

• The provision of tax incentives for property, as well as exemption from customs duties on imported equipment for shipbuilding yards and shipowners involved in the construction of LNG-powered ships; • Exemption from customs duties for imported components and equipment used in the construction of LNG-bunkering bases; • Granting of preferences to shipping companies using LNG-powered vessels in competitive procedures forState and municipal orders; • Provision of subsidies to reimburse part of the costs of reconstruction of sea and river vessels to use gas fuels; • The right to accelerate depreciation of LNG equipment, as well as the equipment and facilities providing LNG bunkering; • Exemption from the land tax for land used for construction of bunkering bases up to 5 years from the date of their entry into service; • Exemption from property tax for organizations owning coastal and seaport technological complexes, equipment for the shipment and storage of LNG, port and auxiliary LNG-powered vessels;

It is set down in the state programme that in 2022 the number of LNG-powered vessels will be 14 (including tugs, bunker tankers, an icebreaker and a car-passenger ferry). Three LNG bunkering bases will be built in the seaports of the Russian Federation. The State programme also provides expansion of LNG use by the river fleet. Tatarstan was chosen for implementation of the pilot project. Then Northwest of Russia and Moscow Region will follow. Significant traffic on suburban river routes exists in these regions. A lot of construction cargoes and oil is also transported along river routes. In the first instance, LNG will be supplied to passenger high-speed vessels and sea-river class tankers. The only official magazine of IBIA, World Bunkering autumn 2017

Svetlana Vorontsova

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fuel quantity

The rise of the machines?

Michael Green, Global Technical Manager at Intertek ShipCare, discusses whether a surveyor is still needed for bunkering when mass flow meters are in use

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or an industry that is perceived as being slow to adapt to change and somewhat stuck in its ways the shipping and bunkering industry has seen more than its fair share of watershed moments in recent years. Although the journey from the sail powered vessels used by the ancient Egyptians in around the 30th century BC to the modern diesel powered vessels used today, has taken quite some time we now find ourselves in a world where significant changes and developments come along as regularly as the good old number 10 bus. Since the implementation of the first legislative step mandated by MARPOL Annex VI in 2005 the march of legislative change has been nothing short of relentless – well relentless in terms of shipping and bunkering, that is. These changes have forced an alteration in mind-set for the industry as a whole – suppliers in relation to the product they sell, owners in relation to their compliance options and ports all over the world in relation to the vessels they service and particularly their storage and supply capabilities. Other developments within the industry have followed hand in hand with this legislative progression with many capturing the imagination whilst others have fallen by the wayside.

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The port of Singapore has often taken the lead with such initiatives and one which has polarised opinion in recent years is the use of Mass Flow Metering technology for the supply of fuel. The authorities in Singapore took the step of mandating the use of MFMs for all HFO bunkerings as of 1 January 2017 and this particular step has been a focal point for discussion long before the ruling came into effect. For many it was seen as a key piece in the jigsaw in helping to promote transparency within the supply chain, but it was also suggested it sounded the death knell for traditional bunker surveyors whose role had been made obsolete by the introduction of automation. For many industries the introduction of automation and technology has removed the need for the human element and this particular aspect of the use of MFMs is one that has divided the bunkering community. Some feel the attendance of a traditional surveyor is now an unnecessary expense and undermines the use of the MFM whilst others feel the role of the surveyor is a vital part of the process and the absence of an impartial third party promotes the opportunity for unlawful practices.

In looking at the data accumulated in the months following the implementation of MFMs for all HFO deliveries in Singapore, it is quickly apparent we have seen a significant reduction in the number of short deliveries and issues associated with deliveries. Looking specifically at the figures from the beginning of February to the end of July we can see that 69% of all HFO deliveries showed a difference in the vessel received figures compared to the BDN figure of less than + / - 1 tonne. Around 12.7% of deliveries showed a short delivery of 1 tonne or more with around 18.3% of supplies showing an over delivery of 1 tonne or greater. Compare this with figures from 2016 (Feb to Dec) where around about 36.4% of all deliveries attended by a ShipCare surveyor showed a perceived short delivery of 1 tonne or greater and it looks like significant progress is being made. If we accept these facts at face value then it would suggest that the application of MFMs has provided a huge step forward and more than halved the number of cases where a short delivery of 1 tonne or greater was noted.

The only official magazine of IBIA, World Bunkering autumn 2017


H

owever, before we get too excited these figures must be considered in context and it must be noted that for each delivery a surveyor was in attendance. If we are to be particularly cynical one question that needs to be asked is – would these figures have been any different if a surveyor hadn’t been in attendance? The honest answer to this question would probably have to be a definitive no, which then poses another question – why? Humans are nothing if not resourceful and every new development within the industry that limits the possibility of fraudulent behaviour is almost tantamount to a rallying cry which lays down a new challenge to be beaten.

Average Variance (tonnes)

February

March

April

May

June

July

0.31

0.51

0.37

0.38

0.19

0.06

fuel quantity

A closer examination of the figures for each month also provides positive reading, in that, across the 6 month period being examined the average variance per MFM BQS per month peaked at 0.51 tonnes in March and hit a low of 0.06 tonnes in July. If we can honestly say that the worst figures seen equate to an average variance of 0.5 tonnes per delivery for all deliveries across a single calendar month then surely we can conclude the system is working extremely well.

* All figures quoted are based on the quantities the vessel claimed to receive versus the figure quoted on the BDN

Cases have been cited where the MFM system has been engaged too soon – prior to the bunkering beginning – or the MFM system has been switched off too soon – such that “flow back” to the barge was not registered by the meter – in an attempt to defraud the buyer.

This in itself is one of the key reasons why the technology cannot stand alone and Section 10 of TR 48 – Metering Procedures – provides specific guidance in relation to the duties to be carried out by the attending surveyor to ensure the integrity of the meter.

Such practices have resulted in swift action being taken with a number of supply barges having their licence’s suspended following unauthorised alterations being made the MFM system.

The step change from manual soundings to the use of an MFM has been likened to a leap of faith but it certainly doesn’t have to be a blind leap. From what we’ve seen since the turn of the year it is clear that MFMs can provide a robust, transparent system that benefits all, but in order to make the system work it is vital that we make sure we utilise all the tools available. This most certainly means that a standalone system is never going to be as robust as it could be without the human element given the very human face of its opposition.

The key point for consideration at this time is; despite the efforts being made to eradicate unlawful practices, equal effort is being applied on the other side of the process to look at new ways to fool the technology.

Cases reported in the media and directly experienced by ShipCare surveyors have seen a shift in the type of issues noted since the implementation of MFMs and many of these have been detected as a direct result of an independent surveyor being present. Specific cases have been reported where bunker barges have been found to be using techniques which re-direct fuel back into their storage tanks after it has passed through the MFM, via pipe work connected between the meter and the delivery barge’s outlet flange. Similarly cases have been reported where the equipment has been misused during the bunkering, to imply a greater quantity of fuel has been transferred than has actually been received. Michael Green

The only official magazine of IBIA, World Bunkering autumn 2017

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Independents

Tough times for independents Even the big independents are under pressure in a challenging market – and that is likely to intensify in 2020

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he collapse of OW Bunker three years ago should in theory have been the cue for ship operators and physical suppliers to cut out the middlemen, take advantage of modern communications and deal directly with each other, cutting out, especially, the traders. To a significant extent that has happened but the real world is more complicated. Veteran industry insider, and now senior partner in 20|20 Marine Energy, Adrian Tolson calls this a process of “disintermediation” as seen in the report from a Platts conference in this issue of World Bunkering, It has indeed resulted in a decline in volumes that bunker traders are selling, with a resulting impact on their profits. The catalyst for this change was the collapse of Danish trader OW Bunker in November 2014, which disrupted the market’s supply chain and structure and encouraged shipowners to look at purchasing supplies themselves. “When OW Bunker collapsed, there was a sense among the industry that this was retribution, and that they got what they deserved,” Tolson told the recent Bunkering in Asia conference, according to an Argus Media report. “The collapse gave buyers and suppliers the opportunity to remake the supply chain in a way that worked better for them, and saw them forge closer relationships.”

Tolson expected the process of disintermediation to continue until at least 2020, with refiners increasingly looking for ways to make direct channels to shipowners. That is bad news for independents or as Tolson put it: “This could even threaten the viability of physical bunker suppliers, although many are expected to survive as regional specialists.” There is more bad news. Tolson noted: “The majors are reinvigorated, and are looking at coming back into the market”, with some of this driven by the prospect of selling new low-sulphur fuels in response to legislation due to come into force in 2020 limiting the sulphur content in marine fuels to 0.50%.

That is not surprising when a single unpaid stem would likely wipe them out. The OW experience is unlikely to have made them more open to taking risks. However understandable, being risk averse could work against physical suppliers in 2020, according to a major player on the other side of the fence. Glander International Bunkering (GIB) CEO Carsten Ladekjaer was recently reported by Ship & Bunker as saying that the sulphur cap will result in increased financial pressure on both shipping and physical suppliers, a situation that will ultimately be to the benefit of large bunker traders.

The financial effects of the OW collapse are far from over. In some cases shipowners who paid physical suppliers for stems ordered from OW are finding themselves in jeopardy of having to pay twice for the same fuel. One such case, involving Norwegian Cruise Line, is currently before a US court. In that case the physical supplier was able to arrest the ship and was paid by the shipowner.

He was reported as saying: “We know that one of the reasons behind the increased competition in the current market is a direct result of the abundance of riskwilling capital currently available in the bunkering sector. The expected increase in prices globally after 2020 will lead to an increased demand for credit. Physical suppliers are generally risk averse and not geared towards granting extended credit to the clients. Instead, they are likely going to need all the cash they can get to finance their OPEX and not least their more expensive cargoes.”

What is unclear is how many independent physical suppliers took big hits from the OW disaster. The smaller independents are seen as being profoundly risk averse.

The view that financial strength is going to be vital is shared by two big independents, both of whom are finding the current market tough going.

Tolson also pointed to the consolidation in the shipping industry, which he said has also given shipowners more power, and has encouraged them to bypass traders in some cases. Technology has allowed buyers and sellers to connect more easily. So is that good news for independents? The answer is: only up to a point.

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OW Bunker’s Star Goethals and Star Baltic off Panama in 2014 The global supplier’s collpase has had profound implications

The only official magazine of IBIA, World Bunkering autumn 2017


WFS has the advantage of operating in three markets, as its chairman and CEO Michael Kasbar noted: “Our aviation segment posted strong results in the second quarter with solid growth coming from our core resale business, as well as strong performance from our recently acquired international fuelling operations. While certain headwinds in our marine and land businesses persist, we remain focused on achieving operational efficiencies which should serve us well as we execute on our long-term growth strategy.” According to Maritime Executive, Kasbar plans to do more than just achieve operational efficiencies. He said that he wanted to reinvent his company, taking it beyond its original business of buying and selling fuel and into the broader realms of energy, technology, logistics and payments. The idea is to turn WFS into “a ubiquitous global energy management, logistics and payments company to the transportation, commercial, industrial and governmental sectors”. Meanwhile Aegean Marine Petroleum has also been fighting headwinds. Jonathan Mcilroy, Aegean’s new president, commented, “During the second quarter of 2017, we continued to see challenging market conditions across the shipping and marine fuel space. While demand for marine fuel remains high, sales margins remain under pressure by a combination of low oil prices, depressed commercial shipping freight rates and fierce competition on the supply side.

Independents

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orld Fuel Services Corporation (WFS) reported that in the second quarter of this year its marine segment generated gross profit of US$32.9 million, a decrease of $6.7 million or 17.0% year-over-year.

“In this context, and within the challenging market conditions I described, Aegean achieved a solid performancez in the second quarter of 2017. Compared to Q1 2017, the Company achieved higher sales volume with improved profit margins. Furthermore, we reduced operational expenses and improved our profitability. While more work remains to be done in the cost reduction area, we are on our way to executing on specific initiatives positioning us well to benefit from any market upturns,” he added. McIlroy explained: “Executing on asset optimization, we are moving assets out of congested areas where they are underutilized and move them to other areas within our network where they can be better utilized and with higher margins. At the same time, we are selling or leasing assets to third parties. In terms of new business development, in Q2 2017 we announced the launching of a new service centre in Savannah, Georgia, the third largest container port in the United States. Furthermore, we established a bunker trading office in Dubai and presence in Taiwan. Also, the acquisition of OBAST Bunkering & Trading GmbH in Rostock, which we announced in Q1, is contributing to our business in Germany.” “We are further leveraging Aegean’s global infrastructure and branding by pursuing a growth strategy that does not require intensive capital expenditures. We seek to enter new areas or to maintain our presence in key hubs by teaming with local operators.” Aegean’s move towards using local partners may be beneficial to some struggling smaller independents but overall these remain tough and uncertain times.

Mcilroy has replaced E Nikolas Tavlarios who stood down in June following a poor first quarter. Mcilroy said: “The new leadership team appointed in July 2017 focuses on four main objectives. To rationalize our global platform delivering on asset optimization; to execute on the cost saving initiative; to capitalize on key business development projects and to generate new revenue streams that leverage our global platform and built-in capacity. The only official magazine of IBIA, World Bunkering autumn 2017

Adrian Tolson

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Equipment & Services

Verifavia has recently certified ABB’s MRV module to monitor all parameters to comply with the EU’s MRV regulation requirements

MRV looms large Verification companies are scrambling for shares in a large market

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here was flurry of announcements from companies and organisations offering to help ship operators comply with European Union’s Monitoring, Reporting, and Verification (EU MRV) of CO2 regulation in time for its initial 31 August deadline The first requirement was to submit an EU MRV compliance Monitoring Plan (MP) to a ‘verifier’ by 31 August. Judging by the number of announcements by different companies this process was happening very late in the day. The EU regulation lays down rules for developing a MP and submitting the emissions report for ships above 5,000 gross tonnage, arriving at, departing from or sailing between ports under the jurisdiction of an EU member state, regardless of the ship’s flag. The MP sets out how a ship’s operational data is to be collected. Back in March the United Kingdom Accreditation Service (UKAS) confirmed ISO 14065 accreditation on Lloyd’s Register LRQA to assess monitoring plans and verify emissions reports in compliance with the MRV Regulation. LRQA said then that it was in the first group of verification bodies to receive accreditation against the international management system standard for greenhouse gas validation or verification. Ged Farmer, Sustainability Technical Manager at LRQA, commented:

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“MRV Regulation represents a significant change in the way ship owners and operators will be required to monitor, report and have their CO2 emissions verified. The achievement of accreditation to ISO 14065 will allow LRQA to deliver a range of assessment and verification services to our many clients that operate within shipping, ensuring that they are well prepared and all relevant ships are compliant.” Among more recent moves, Bureau Veritas and Singapore based Ascenz have signed a memorandum to provide ship performance and monitoring solutions to shipowners world-wide. The agreement will enable Bureau Veritas to offer Shipulse, Ascenz’s solution for real time ship performance and monitoring. Shipulse captures critical shipboard data to provide insights for better decision making, fuel savings and optimized vessel performance. The data captured covers fuel consumption, bunkering activity, engine, hull and propeller performance. The Shipulse ‘CarbonComply’ module supports MRV monitoring and reporting requirements. As an EU MRV Recognized Organization, Bureau Veritas recognizes the CarbonComply module from Ascenz. CarbonComply enables automated monitoring and reporting of ship CO2 emissions under EU MRV regulation requirements.

Reporting is a natural output of the Shipulse fuel consumption data and performance analysis. A unique capability of CarbonComply is to register voyages automatically without the need for manual calculations to break down fuel consumption or emissions on a per voyage basis. Furthermore, the system is able to detect and classify different voyage stages such as sea passages, manoeuvring, drifting and to identify when a ship is either moored or at anchor. This then allows for greater granularity from profiling emissions associated with a sea passage versus that from time spent when anchored. Another major player, emissions verification company Verifavia, said in early July that the company had over 1,000 ships and MPs under assessment for MRV compliance. The company said: “This is a significant milestone for the company, which became the first globally accredited verifier to receive dual accreditation under ISO 14065 standard and Regulation 757/2015 three months ago. With accreditation from the United Kingdom Accreditation Service (UKAS) and France’s national accreditation body, Cofrac, the company is able to assess or verify any ship, anywhere in the world, regardless of country of ownership, flag state, or class.” A few weeks earlier, at the end of May Japan’s ClassNK Consulting Service Co launched its MRV support service.

The only official magazine of IBIA, World Bunkering autumn 2017


Also in May Korean Register (KR) said it had been authorised by Germany’s National Accreditation Body (DAkks) to act as an MRV verification body for ships of all flags. The classification society’s chairman and CEO Lee Jeong-kie commented: “We are proud to have obtained this accreditation from DAkkS without any non-conformities, even though it was the first accreditation audit we have undertaken. Meanwhile US-based classification society ABS announced that Prime Tanker Management was among first to have a monitoring plan assessed by ABS, following completion of a monitoring plan assessment for the lead vessel in the Prime Tanker Management fleet. “Completion of this assessment represents a significant milestone for Prime Tanker Management,” says ABS Vice President for Global Marine Peter Fitzpatrick. “As the first class organization accredited to perform EU MRV assessments, ABS is leading the way in helping streamline and simplify the compliance process for shipowners and operators.” In June, Arcadia Shipmanagement became the first company to receive verification from classification society DNV GL for MRV compliant monitoring plans for its whole fleet under the new EU regulation. The company was presented with a certificate recognizing the achievement at DNV GL’s Piraeus office. “We are very proud to be the first shipping company to have been awarded the verified EU MRV management plans, for our fleet, by the world’s leading classification society, DNV GL”, said Mattheou Dimitrios, Managing Director of Arcadia Shipmanagement Co Ltd. “This verification marks the first milestone for smooth compliance with the EU MRV regulation.”

It seems many firsts and many milestones were achieved in the run-up to the 31 August deadline. Meeting IMO Tier III As the need to comply with IMO Tier III NOx emissions requirements bears down ever more heavily on the shipping industry, classification society DNV GL has developed a new brochure to offer a set of best practices for the design of ships subject to NOx Tier III requirements. It also offers guidance on the considerations that should be taken into account at the newbuilding stage. DNV GL says: “To ensure the success of any newbuilding plan, shipowners should carefully consider the future operation of their vessels in the newbuilding planning stage, including the implications of the different technological solutions for reducing NOx emissions and how to fulfil the NOx Tier III requirements. In order to fulfil the stricter NOx Tier III emission limits, ship operators have the possibility of choosing from various options. The optimal compliance option will depend upon many factors, including a vessel’s individual trading pattern, engine size and speed. The brochure examines selective catalytic reduction (SCR), exhaust gas recirculation (EGR), the use of alternative fuels, internal engine modifications, direct water injection (DWI), fuel-water emulsion (FWE) and intake air humidification.” The classification society stresses that installing NOx Tier III-compliant technology can offer benefits beyond simply achieving compliance with emissions regulations. Demonstrating a company’s commitment to ensuring sustainable operations has become increasingly important. In addition, the installation of Tier IIIcompliant technology also goes hand in hand with direct financial benefits, as many major ports offer substantial discounts on harbour fees if a vessel complies with third party environmental schemes such as the Environmental Ship Index. The new brochure can be downloaded free of charge at https://www.dnvgl.com/ maritime/publications/NOx-TIER-3-Updatedownload.html

The only official magazine of IBIA, World Bunkering autumn 2017

Meanwhile technology group Wärtsilä is to supply the main engines for a new and innovative expedition mega yacht, owned by Genting Hong Kong which also owns the MV Werften yards in Germany where the vessel is to be built. There is an option for an additional two vessels in this “Endeavor” class series. The order with Wärtsilä was booked in March 2017. The new vessel will be the world’s largest expedition mega yacht with ice class certification, and will be able to operate in polar region waters. Passenger comfort and operational reliability were cited as being major considerations for the equipment selected. Four 6-cylinder Wärtsilä 32 engines combined with Wärtsilä NOx Reducer (NOR) systems will provide the electrical power for the ship. The system is fully compliant with the IMO Tier III exhaust emission regulations set out in Annex VI of the MARPOL 73/78 convention. The equipment is scheduled to be delivered to the yard in 2018. “This is an exciting newbuild project and we are proud to have been selected as a supplier. The Wärtsilä 32 engine is extremely well proven and features excellent reliability and easy maintenance, both of which were important factors in its selection,” says Lars Anderson, Vice President, Engine Sales, Wärtsilä Marine Solutions. Wärtsilä had earlier delivered more than 30 Wärtsilä 32 engines for eight vessels built by these yards and the company has also delivered the majority of the 4-stroke engines, both main and auxiliary engines, installed by the yard during the past ten years. The Wärtsilä 32 engine is based on the latest achievements in combustion technology, and is designed for efficient and easy maintenance with long maintenance-free operating periods. The engine is fully equipped with all essential ancillaries and a thoroughly planned interface to external systems. The Wärtsilä 32 engine, in conjunction with the Wärtsilä NOR system, is fully compliant with the IMO Tier III NOx exhaust emission regulations set out in Annex VI of the MARPOL 73/78 convention.

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Equipment & Services

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t said its support service included providing a standard form, guidance and necessary advice to set up an MP for the purpose of supporting customers to obtain verification and facilitate a smooth implementation.


Equipment & Services

ABB shaft generators and turbochargers for DFDS ABB shaft generators are being fitted to improve energy efficiency on two DFDS vessels which have been designed to meet the latest environmental regulations. Two shaft generators will be installed in each of the cargo RoRo ships allowing the main engines to operate at a wider, more optimal speed range. The shaft generator system takes its power from main engines, thereby increasing safety if there is a failure on the auxiliary engine. The ships’ main engines will also be turbocharged by ABB’s latest generation technology. Juha Koskela, Managing Director of ABB’s Marine and Ports business said, “Efficiency and safety are cornerstones of the maritime industry and our shaft generators will introduce both to these DFDS vessels.

Not only is this an environmentally friendly technology but it is also very cost effective.” By using an alternative power source the shaft generators allow the main engines and the propeller pitch to be optimized no matter what the vessel speed, adding the load on the main engine and improving overall fuel efficiency. The system will be tailored for the vessels which will operate in DFDS’ North Sea network. The shaft generator system also enables the vessel to be sensitive to the local community and environment when it reaches port as it is compatible with shore-to-ship power.

This allows the ship to shut down its auxiliary engines when it berths, therefore reducing emissions and vibrations. Two high performance A270-L turbochargers for two-stroke engines were selected for each vessel, reducing fuel consumption and consequently lowering emissions further. For the typical demands of low-speed marine engines, the turbochargers offer greater engine operating flexibility: high pressure tuning for part or low loads, and designed for best efficiency in slow-, and ultra-slow steaming. The two 6,700 lane meter Ro-Ro’s, the largest ever freight vessels to be built for DFDS, will be built by Jinling Shipyard in China for delivery at the beginning of 2019, with an option of a further four vessels.

Wärtsilä is to supply the main engines for a new and innovative expedition mega yacht

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The only official magazine of IBIA, World Bunkering autumn 2017


legal

Fraud case duo jailed

Two Singaporeans sentenced for fraud in US$34 million US Navy corruption scandal

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wo former executives of Singapore-based defence contractor Glenn Defense Marine Asia (GDMA) were sentenced to jail terms for conspiring to submit bogus claims and invoices to the US Navy for services including bunkers for warships. Neil Peterson, 39, and Linda Raja, 44, were sentenced to 70 and 46 months respectively for their part is what has become known as the ‘Fat Leonard’ scandal. While the pair held senior roles at GDMA, the mastermind behind the frauds and corruption was Malaysian national Leonard Francis who is expected to be sentenced by the end of the year. According to press reports Francis agreed to work with the prosecution when it was discovered that US Navy officers had been bribed with prostitutes and stays at luxury hotels to get them to help GDMA win inflated contracts to service US ships in the Asia-Pacific region. As of mid-August, 18 of 27 defendants, including Francis, had pleaded guilty. According to a US Justice Department statement the frauds were committed in an effort to win contracts and overcharge the US Navy by tens of millions of dollars as part of a years-long corruption and fraud scheme. Press reports put the amount defrauded at over US$34 million.

Both defendants were arrested by authorities in Singapore at the request of the US government and were extradited in October last year. They each pleaded guilty in May 2017 to one count of conspiracy to defraud the US government. According to admissions made as part of Peterson’s and Raja’s plea agreements, they and other members of GDMA’s management team created and submitted fraudulent bids that were either entirely fictitious, contained falsified prices supposedly from actual businesses, or fraudulently stated that the business shown on the letterhead could not provide the items or services requested. In this manner, Peterson, Raja and other members of GDMA’s core management team could ensure that GDMA’s quote would be selected by the US Navy as the supposed low bidder. GDMA could thus control and inflate the prices charged to the US Navy without any true, competitive bidding, as required, they admitted.

In an example presented to the court Peterson and Raja admitted that for the visit of the USS Bonhomme Richard to Kota Kinabalu, Malaysia, in or about October 2012, under the direction of Peterson and other members of GDMA’s core management team, false documents and inflated invoices were presented to the US Navy. The full amount billed to the US Navy for this visit was $1,232,858, of which approximately $877,413 was fraudulently inflated, Peterson and Raja admitted. An Australian Associated Press report in August said that two senior Royal Australian Navy personnel were also being investigated in connection with the case.

Peterson and Raja admitted that they and other members of the GDMA management team knowingly created and approved fictitious port authorities with fraudulently inflated port tariff rates, and approved the presentation of false documents to the US Navy. In that way GDMA thus charged inflated prices to the US Navy, rather than what GDMA actually paid to the bona fide port authorities.

The only official magazine of IBIA, World Bunkering autumn 2017

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LNG

SEA\LNG sees 2020 opportunity LNG group calls for strict sulphur cap enforcement and predicts rapidly developing global LNG bunkering network

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EA\LNG, the multi-sector industry coalition working to facilitate and accelerate the widespread adoption of liquefied natural gas (LNG) as a marine fuel has urged the industry as a whole to redouble its commitment to compliance with, and enforcement of, the global 0.50% fuel sulphur cap in IMO’s Marpol Annex VI regulations. The coalition’s chairman Peter Keller commented: “Shipping has made significant progress in reducing its environmental impact from harmful emissions, but more needs to be done. All parties, especially the Port State Authorities must play their part. Effective and consistent enforcement, across all jurisdictions of the IMO emissions regulations, will be essential to ensure more environmentally friendly shipping and a level playing field for all shipping companies. Flag states and port authorities have a clear and key responsibility in ensuring compliance. If we do not collectively commit to compliance and enforcement, then we will continue to miss a tangible and viable opportunity to eradicate harmful emissions such as Sulphur Oxide (SOx), Nitrogen Oxide (NOx), and Particulate Matter (PM). This seems unacceptable given the opportunity we have readily at hand.” SEA\LNG, which now has 28 members, added that in addressing the primary concerns of cost and compliance, LNG as a marine fuel provides a means of negating current and potential future local emissions challenges, and is a step in the right direction towards reducing greenhouse gas (GHG) emissions from maritime transport. Keller explained: “LNG far exceeds alternative options in terms of emissions reductions. It emits zero sulphur oxides and virtually zero particulate matter.

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Compared to existing heavy marine fuel oils, LNG emits 90% less nitrogen oxides and through the use of best current practices and appropriate technologies to minimise methane leakage, offers the potential for up to a 25% reduction in GHGs. Advancements in dual fuel technology and propulsion, enhanced control systems, and future use of gas turbine technologies present further opportunity for increased GHG reductions.” SEA\LNG pointed to the developing LNG bunkering structure, noting: “The vast majority of the world’s top ten bunkering ports offer LNG bunkering or have firm plans to do so by 2020. As this LNG bunker market continues to develop, there is already a drive to meet demand for LNG as marine fuel at these and other critical locations. By the end of 2017, six LNG bunker vessels will be in operation – expanded from one at the start of the year. These vessels are key to scaling-up demand for LNG as a marine fuel and delivering fuel in a way that is “normal” for shipowners. Added to which, new bunkering hubs are developing which will leverage existing bulk LNG infrastructure. Keller concluded: “LNG will be one of a portfolio of solutions going forward to help lower emissions, creating a more sustainable future for shipping. We recognise that there are barriers and limitations, but we are confident that by working together, we can overcome these hurdles as the industry has always done in the past. We do, however, require a greater sense of urgency and commitment.”

VLOC LNG project launched In an announcement at the Gastech 2017 event, Woodside Energy, Anangel Maritime Services, Hyundai Heavy Industries, General Electric Company and Lloyd’s Register launched a project to design an LNG-fuelled very large ore carrier (VLOC). The joint design programme is aimed at exploring the suitability of various technologies for large ships, such as VLOC. A statement comments: “The next generation of cost efficient and environmentally-friendly large ships are best defined by the design development of an alternative propulsion system, improved asset safety and reliability. The agreement outlines the joint design project for a conventional dual-fuel powered VLOC incorporating proved technologies. The next stage of the joint design programme will then investigate the design and benefits of highly efficient next-generation LNG fuelled propulsion systems.” A programme of work has been agreed by the joint parties to address design, construction and operational aspects including LNG bunkering, with the aim to create a new generation of cost efficient, safe, reliable and above all, environmentally-optimised design for large ore carriers.

Erik Thun orders dual- fuel tankers Swedish-based shipowner Erik Thun has ordered four dual-fuel, LNG and diesel, coastal tankers from Ferus Smit in the Netherlands. The 115 metre long coastal tankers feature a ‘next generation’ design focusing on high energy efficiency, low noise levels both above and below the water, and environmental sustainability. Each vessel will be fitted with a six-cylinder Wärtsilä 34DF dual-fuel main engine and Wärtsilä will also supply its LNGPac fuel supply system, gas valve unit and a controllable pitch propeller with HP nozzle. When delivered, the ice-class 1A vessels will be capable of handling the year round sailing conditions in the Baltic Sea.

The only official magazine of IBIA, World Bunkering autumn 2017


company NEWS

Galp getting ready for 2020 Galp, and its subsidiary companies including Petrogal SA, is the only fully integrated energy group in Portugal

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ts activities range from oil and natural gas exploration and production to the refining and distribution of petroleum products, the distribution and marketing of natural gas and the generation of electrical power. It has more experience than any other Portuguese company in the energy sector, with a successful business history that stretches back over 100 years. The company entered the stock market in 2006. Galp is the market leader in Portugal in the petroleum product distribution business and has a significant presence in Spain. This business includes the sale of refined products to direct customers, namely to the retail sector and filling stations, and to the business or wholesale segment: transportation, aviation, industry, contractors, marine and lubricants. In what concerns the bunkers marine business, the company is getting ready for the 2020 challenge. Researching, studying and testing several possibilities to achieve one goal: to be ready to supply the market in 2020. During the Atlantic Meeting Conference, organized every year by Galp for their clients, the company revealed details about its plans. Galp explained its studies and all the work done so far in what concerns the Global Cap 2020.

From the refinery perspective, regarding the product quality, Galp has showed that there are several options on the table; residuals and/or distillates to achieve the 0.5% Sulphur cap, paying special attention to the product’s stability and compatibility factors that remain a concern in the market. Galp also illustrated the logistic challenges that new products can bring to a supplier and how the company is dealing with it. Moreover, Galp is also prepared to supply LNG in the Portuguese ports. Initially it will commence with truck deliveries but other delivery options of pipeline and/or barge supplies will be considered as well according to the market growth and potential. Additionally, views relating to market expectations, likelihood of compliance and the differing views of future price trends were also discussed at the Atlantic Meeting 2017 Conference. Galp continues to grow it’s bunkers business dedicating special attention to bunkers only calls in the port of Lisbon. Working closely together with the Port Administrations to reduce calling costs, offering competitive prices and making Lisbon a port not just for cargo operations or bunker lifting’s but also a port where ships can be provided with all kind of extra services.

The only official magazine of IBIA, World Bunkering autumn 2017

Galp remains ahead of the market priding itself in supplying fuels that already meet the latest ISO edition, i.e.; ISO 8217: 2017. Is also cofounder and member of Lubmarine - a worldwide organization specialized and dedicated to marine lubricants fully integrated from product development, supply chain, marketing and sales. It is present in 100 countries where each company member follows strictly all the procedures that concern technical, performance and safety. Lubmarine provides the shipping industry with the best marine lubricants and greases, associated with first-class service. Galp produces the right lubricant to your ship and supplies at the right port. If you require bunkers in Portugal or Spain then just contact us at Galp. We look forward to receiving your call ! +351 217 240 654/952 +351 210 039 032 bunkers@galp.com galp.com

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company NEWS

Reliability beyond expectations Originating from an established marine environmental service business in Piraeus port in the early eighties, FAIRDEAL MARINE SERVICES was founded in Fujairah UAE - then as the sole provider of offshore marine MARPOL services in the Emirates east coast

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AIRDEAL with a strong heritage of effective supply chain and vessel management, in-house tonnage, competitive trading, local knowledge and regulatory compliance put FAIRDEAL into a key position to provide a personalised bunkering service for a wide range of international clients. FAIRDEAL delivers all the standard fuel oil grades normally demanded in the UAE region with strict quality control procedures. Traceability is also considered an important virtue in the delivery structure. Currently, with managed storage capacity and three ideal capacity bunker vessels, a 24/7 bunkering operation is sustained. FAIRDEAL also provides physical supply services to oil companies and traders who do not have local tonnage. Physical supplies are carried out in full compliance with local regulations, industry good practices and efficient supply chain procedures. Efficient delivery schedule is achieved by closely working with agents in Fujairah. Fujairah is recognised as the #3 global bunker hub after Singapore and Rotterdam. The vision of the Government of Fujairah, delivered by the Port of Fujairah and all stakeholders has realised this remarkable success in a short period of time.

FAIRDEAL’s Environmental Services is a core service since the inception of FAIRDEAL in Fujairah. It covers Offshore Deslopping Services and Oil Spill Rapid Response Services. These services are licensed by Government of Fujairah and Sharjah and approved by Port Authorities of Fujairah and Khorfakkan. Retainer contracts are held with major shipping clients and terminals. FAIRDEAL Marine Services is also a success story in other business areas and has integrated additional services as customers’ demands have varied and grown. Marine Safety Equipment Services • Comprehensive servicing of LSA and FFA equipment to ISO system standards • Easy vessel access and servicing from service station inside Fujairah Port. • Certified by key members of IACS Technical Services Offering wide range of technical support: • On and offshore Mechanical Works,

• Electrical Services and trouble shooting, • Refrigeration / AC Service and maintenance, • Electronic and Navigation equipment, • Calibration and services of cargo/ bunker gauging tapers, automation and measuring instruments etc. • The services are performed under ISO/ QHSE guidelines of BV.

Agency Services include • Comprehensive husbandry services crew/stores – spares/ surveyors-superintendents, • Fresh water supply, • In- house crew and utility boats, • Anchor Salvage and repairs. The current infrastructure and competency developed during three decades of performance ensures FAIRDEAL Marine Services will remain a strong and key player in bunkering and continue servicing their many long and valued clients with whatever their needs may be.

• Light Fabrication Works,

Likewise FAIRDEAL has been able to share in this success by retaining and growing a significant share of this market. This reflects not only on the skills of the FAIRDEAL commercial bunkering team but also the ship management and the vessels’ committed crews consistently delivering at any time in all weathers.

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The only official magazine of IBIA, World Bunkering autumn 2017


Bunkering by truck or by barge in all French ports

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reated in 1999, ATLANTIC ENERGY is a French company specialized in bunkering operations and negoce fuels. We are able to deliver our products in all the French ports and to supply all vessels with Marine Gasoil or Fishing Gasoil (max Sulphur 0,10 %) by truck in France.

ATLANTIC ENERGY have created a bunkering opportunity by barge at ROUEN and LE HAVRE port area to supply Marine gasoil 24 hours a day, 365 days a year, via dedicated barge service.Our barge can deliver all required fuel volumes, starting from 10 M3 up to 500 M3.

We are also able to meet your marine fuel oil requirement on RMG380 HS (max Sulphur 3,5%) and RMG380 LS (max Sulphur 1,5 %) by truck in South port. In order to ensure compliance with the ISO-8217, all products delivered by ATLANTIC ENERGY are regularly analyzed. We deliver all the products in respect of Marpol regulation.

All the ports in Channel, from Dunkerque to Brest by truck and at Le Havre, Rouen by truck and by barge. All the ports in Atlantic coast, from Brest to Bayonne by truck. All the ports in Mediterranean coast, from Monaco to Port Vendres by truck. ATLANTIC ENERGY can offer to owners, to charterers,to operators and to traders inner French ports.

The only official magazine of IBIA, World Bunkering autumn 2017

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company NEWS

atlantic energy


company NEWS

A simple strategy in a complex market Certas Energy is the largest independent fuel and lubricants distributor in the UK with a growing marine department which boasts three current physical locations, namely Aberdeen, Thames and Tyne

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longside investing in new physical locations, Certas Energy has a large network of depots near every major port in the UK, from the Isle of Wight to the Shetland Islands, and a fleet of over 940 tankers giving the capability to service and cater to all of our customer needs.

Not only are we competing to win contracts on price but – thanks to a longstanding career in risk management and hedging – I’ve embarked on a plan with Gary and our team to bring greater cost stability to the market with our new and existing customers.

A simple strategy in a complex market The investments we’ve made – and will continue to make – in our bunkering and service-side capabilities are a real statement of intent from our business. And we’ve not finished yet. Watch this space during the course of 2017 and beyond for more exciting announcements…

Best-in-class products and services We’ve built the capabilities to support every type of bunkering need and we’ve set out to become the industry’s ‘one stop shop’ for marine fuels and lubricants. We want the world to know.

But we know that investments alone cannot win us more market share in a heavily competitive UK marine fuel and lubricants market. It’s also going to take a strong focus on our service. It sounds simple. That’s because it is. We have a clear course and it is focused on three things: 1)

Service quality

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Best-in-class products, and;

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Reliability

We supply all grades of marine fuel and we are the only licensed distributor of Shell lubricants in the UK marine sector. So, whether our customers and clients need a single drum or an eye-watering tonnage of fuels and lubricant, we can, and want to, help. This flexibility, combined with our infrastructure and delivery capabilities, enable us to compete with anyone in our market.

Making reliability our standard Health and safety is non-negotiable for us and it’s vital we ensure we’re operating to the very highest global safety standards. But we’re aiming to combine it with speed, efficiency and dependability. A dedicated delivery fleet and bespoke bunkering facilities, means our customers can depend on us, so that reliability is seen as our standard. And if you know me at all, you know I will do my best ! Setting our course So, we’ve set a course we believe will enable us to win more of the marine fuels and lubricants market in the UK and we’re confident we’ll earn the trust of many more customers in 2017 and beyond. Varun Chhabria Head of Risk and Marine at Certas Energy Talk to the experts 0345 601 1880 e:marine@certasenergy.co.uk www.certasenergy.co.uk/marine

whilst ensuring that we remain competitively priced Cost controls – pricing to win In a cost sensitive fuel environment, which can be dramatically impacted by global issues way outside of our control, we’re continuing to compete hard for our business on price. How? Well, we’ve focused on controlling what’s in our control and been creative in the bespoke financial solutions we offer our customers. Flexible credit terms, forward pricing, ordering in all units whether it is tonnes, litres, cubes or MT? Paying in sterling, dollars, or Euros? No problem.

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company NEWS

De Chermont & Partners Ltd Marine & Cargo Surveyors Shipping Consultants

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e Chermont & Partners Ltd is one of the leading Marine & Cargo Surveying firms in Mauritius, operating since 1989. Originally started in 1973 by Captain Daniel de Chermont, Master Mariner, with a season staff of Senior Marine Surveyors, De Chermont & Partners Ltd was formed following the passing of its founder in 1989. The company has been a pillar of the Marine and Cargo Surveying business and shipping consultant in Mauritius since that time, serving clients locally and internationally. We offer a wide variety of services and our entire staff of surveyors are eager to assist customers with all of their needs. +230 2121848 or +230 2124949 (Tel) +230 2101278 (Fax) web@dcplpro.world

Captain Laval Lam Kai Leung Operations Manager llamkaileung@dcplpro.world

NEXT ISSUE

Special Features: Blending

As 2020 approaches oil companies are introducing more blended fuels to meet the regulatory requirements for low sulphur fuel. We look at what is on offer now and what is being developed.

Fuel Additives

According to their manufacturers, additives can offer considerable benefits in terms of economy and engine protection. What is on offer and how effective can additives be?

Barge Design

Our annual look at bunker tanker designs comes at time when there is pressure to modernise barge fleets and as the need to bunker the small but growing LNG fuelled fleet presents new challenges.

Geographical Focus: Northern Europe

We look at commercial and regulatory developments at the major ARA bunkering ports and also report on the bunkering scene around the UK and the Baltic coasts of Europe and Scandinavia.

Africa

West Africa continues to be a challenging but important market for global bunker operators. We also look at developments within the region and at the main ports along the Cape Coast and in East Africa.

Australia

Environmental regulations have been tightened up in ports such as Sydney, where use of 0.1% sulphur fuel while alongside is now mandatory. We also ask how prepared are Australian ports for 2020.

Regular Features

News, Views & Analysis - Russian Update

Plus: Interview - Industry News – Environment – Scrubbers LNG- Lubricants – Innovation -Legal News - Equipment and Services – Diary - Event Previews & Reviews

The only official magazine of IBIA, World Bunkering autumn 2017

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DIARY

DIARY

30 NOVEMBER 2017

PLATTS MEDITERRANEAN BUNKER FUEL CONFERENCE, ATHENS S&P Global Platts 6th Annual Mediterranean Bunker Fuel Conference returns to the great city of Athens for 2017.

12-13 OCTOBER 2017 ARACON, ROTTERDAM

ARACON is the longest-running and biggest bunkering conference in the Amsterdam-Rotterdam-Antwerp region. Its no-nonsense conference programmes attracts all the main bunker suppliers and barging companies in the ARA and Northwest Europe as well as shipowners and managers from throughout the region. Due to popular demand, particularly from the bunker buying side of the industry, ARACON now takes place every autumn in Rotterdam, the biggest port and by far the biggest bunkering centre in Europe. https://www.petrospot.com/events

After a record breaking year for attendees in 2016, this conference will once again gather over 150 of the region’s leading bunker fuel suppliers, traders, brokers, refiners, ship operators, owners, and other marine fuel industry organizations to discuss the changing landscape of the Mediterranean heading towards 2020. https://www.platts.com/

11-14 December 2017 MARITIME WEEK, CAPE TOWN

Maritime Week Africa is a unique week-long event created to bring together local bunker suppliers and regulators with international traders and buyers aiming to develop business in Africa. Held in Cape Town, South Africa this year’s event comprises the Oil & Shipping Africa conference and specialist training courses, bringing first class knowledge and expertise to a region with enormous but still largely untapped potential. Should you have any enquires regarding this forum please email tahra.sergeant@ibia.net

17-18 October 2017

AFRICAN PORTS EVOLUTION -UNLOCKING AFRICA’S ECONOMIC POTENTIAL THROUGH PORT DEVELOPMENT AND OPTIMISATION, DURBAN Africa is experiencing greater regional integration as trade and transport shifts from overseas partners to regional partners. International trade volumes are also increasing at growth rates of 6-8% per year with higher growth rates for container traffic. The 2040 Vision for Africa’s transport sector is an integrated African continent where the transport infrastructure and services enable the free movement of goods and passengers by providing efficient, safe, secure, reliable and seamless transport options and reducing costs to support environmentally and economically sustainable regional development. AFRICAN PORTS EVOLUTION is a forum where we bring together key maritime stakeholders, so that together we can realise this transport vision. For more information visit: http://www.portsevolution.com/

13-14 DECEMBER 2017

OIL & SHIPPING AFRICA CONFERENCE, CAPE TOWN This high-level two-day conference will cover a range of subjects of particular interest to those working or interested in bunkering in Africa. https://www.petrospot.com/events

19 FEBRUARY 2018

IBIA ANNUAL DINNER, LONDON IBIA will again host its most prestigious annual dinner at the glorious Grosvenor House Hotel in Mayfair. Should you wish to know more, please contact the IBIA office or email ibia@ibia.net

6 – 8 MAR 2018

6-10 NOVEMBER 2017

IBIA ANNUAL CONVENTION, Singapore Mark your calendars now for the IBIA Annual Convention 2017! Our flagship event, aimed at all our members globally, will take place from 6 to 10 November in Singapore, the world’s leading bunkering hub. This will be a great opportunity for delegates to participate in shaping IBIA’s agenda and direction, to learn and get a better understanding of industry developments, and make valuable connections with industry peers. www.ibia.net

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IBIA AFRICA FORUM, TENERIFE IBIA will host its 3rd Africa Forum in Tenerife this year. Tenerife is connected to 278 ports and strategically placed on shipping routes. This event will include one full day’s bunker training suited to the region as well as a one and a half day forum, plus a half day port tour. The Forum will invite key players and partners within the West Africa and Canary Islands region to meet and discuss developments within the port and how this location offers new fuels to meet the industry’s future needs. Should you have any enquires regarding this forum please email tahra.sergeant@ibia.net

The only official magazine of IBIA, World Bunkering autumn 2017


World Bunkering Autumn issue 2017  

Inside this issue: What happens in 2020? Bio-fuels - a long term solution? Do we still need bunker surveyors?

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