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Spring 2017

ADAPT OR PERISH

CHALLENGING TIMES AHEAD FOR TRADERS

inside this issue: IBIA puts bunker industry’s case at IMO Russian Customs breakthrough Fending off cyber attacks

THE ONLY OFFICIAL MAGAZINE OF


editor’s letter

Changes and challenges The rest of 2017 looks set to be an interesting one and IBIA members should have plenty to discuss at their Convention in Singapore

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e have another packed issue for IBIA members. There has been a lot going on, particularly when it comes politics and regulation – and that is not a reference to the recent inauguration of the 45th president of the United States of America! International accountant and shipping adviser Moore Stephens says the shipping industry will use a mixture of experience and innovation to navigate what is likely to be another volatile year for the industry in 2017. “Confidence in shipping increased steadily for most of 2016, underlining just how robust the industry can be in difficult times. The inherent volatility of the industry will continue throughout 2017, during which time shipping will resort to tried and trusted methods and to fresh innovation alike in an effort to keep its head above water.” Moore Stephens concludes optimistically: “Shipping will find a way.” Well, let us hope us so, but for many in the bunker business keeping head above water is going to be a feat in itself. Our feature on Traders highlights just how tough things could be in the face of consolidation in the shipping and bunkering sectors. This year is bound to have its challenges but they could well pale into insignificance in 2020 when IMO’s global 0.50% sulphur cap comes into force. Our deputy editor Unni Einemo has been busy putting bunkering’s case at IMO, and in particular at the recent the Sub-Committee on Pollution Prevention and Response (PPR 4) which looked at the details of implementing the cap. Unni has reported back in depth on PPR4 and makes it clear there are many areas still not satisfactorily addressed. There is not a lot of time left.

World Bunkering spring 2017

While the 2020 cap is quite rightly focusing our attention on such matters as the availability of compliant fuel and the feasibility of fitting scrubbers, another issue is looming large: an almost inevitable requirement to cap and then reduce shipping’s carbon dioxide (CO2) emissions. Our second environmental feature in this issue highlights the IMO SecretaryGeneral Kitack Lim’s warning to the EU against taking unilateral action on greenhouse gas emissions from shipping. His unusual intervention followed a decision by a committee of the European Parliament to support bringing shipping into a resuscitated version of the currently troubled European Union’s Emission Trading System (EU-ETS). The move would be on a timescale that would take shipping into the EU-ETS before any proposed IMO action on CO2 could be agreed. That proposal still has to go to the European Commission and then the Council but meanwhile the committee has been busy again. Just as World Bunkering was heading for the printers, it called for a ban on using residual fuel oil in the Arctic. While that proposal has been praised by environmental campaigners, it has left the shipping industry representative bodies puzzled. After all, no EU country’s territorial waters or exclusive economic zone extend into the Arctic. An International Chamber of Shipping spokesperson told me: “Most ships will be burning distillate fuel after 2020 as a result of the IMO global sulphur cap, so we are not sure what such a ban would achieve. However, the proper forum in which to have this debate is at IMO.” Quite so, and Russia, whose routes into the White Sea and into important ports on its northern shore are within the Arctic, may well wish to express an opinion if and when such a debate takes place.

This issue covers a lot of other ground. Our geographic features take in the Western Mediterranean, Central America, Caribbean and UAE while our more technical pages look at lubricants, IT, energy management and fuel savings, LNG and scrubbers. Also, there has been a major development concerning how the Russian Customs authorities will treat fuel supplied to vessels in the future. Our Russian correspondent Olga Bogacheva has a full report. There is a good chance you are picking up this issue of World Bunkering at IBIA’s Annual Dinner at the Grosvenor House Hotel, London. If so, enjoy the magazine and the dinner. If not, we would love to see you at the IBIA Convention in Singapore in November.

David Hughes Editor

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Publisher & Designer: Constructive Media studio@constructivemedia.co.uk

Editor: David Hughes anderimar.news@googlemail.com

Deputy Editor: Unni Einemo unni@ibia.net

Project Manager: Alex Corboude alex.corboude@mar-media.com

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

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


content

7

30 - 33

Growing IBIA’s influence

9

Unni Einemo reports from a January meeting which considered what needs to happen to ensure a successful transition to the 2020 sulphur regime

Relationships Key to the Success of the Association

34 - 35

Key bunker conference to address challenges of new sulphur regulations

The bunker market is set for fundamental changes as consolidation in liner shipping adds to the challenges facing traders

55

Chairman’s Letter

Chief Executive’s Report

Environment

Traders

11

IBIA Events 2017 is going to be very busy with IBIA bringing a number of quality events to you throughout the year

36

Fuel Quantity

12 - 13 IBIA Asia

The world’s largest bunker port has brought in mandatory use of mass flow meters

Regional Manager Simon Neo provides an update on activities since October last year and upcoming training courses

38 - 39

15

The shipping industry is becoming increasingly aware of cyber threats but digital is the only way forward

IBIA Africa Regional Manager Tahra Sergeant outlines IBIA Africa’s plans for 2017

IT

40 - 41 Lubes

16 - 17

Vivo Energy World Bunkering spoke to Nazihah Timol, Marine Business Development Manager at Vivo Energy to find out more about Vivo Energy’s marine activity and priorities for the year ahead

Commercial and operational pressures are driving the development of new lubricants

43 - 45

Western Mediterranean

New Members

As John Rickards reports, the main bunkering ports in the Western Mediterranean are all aiming to position themselves to take advantage of a changing market

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46 - 47

18 - 19

IBIA Events

22

Notice Board

23 - 25 Interview

Captain Peter W Hall talks to Unni Einemo about his term at the helm of the International Bunker Industry Association

26 - 29

Industry News Boost for both organisations, giving buyers a stronger voice within the global bunker industry association

Central America The widening of the Panama will have an impact on the regional bunker scene but, as John Rickards reports, it will take time

49 - 50 Caribbean

Caribbean bunker suppliers find themselves in a position to take advantage

51 - 52 UAE

Much depends on whether OPEC’s production cut will really push the price of oil back to $50 a barrel, as John Rickards reports

53

Fujcon

Scrubber Scrubber manufacturers anticipate a spike in demand as the 0.50% sulphur limit looms up

56

LNG New training requirements are also now in force for crews on gas-fuelled ships

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Legal Correct sampling procedures are key when quality disputes arise

60 - 63

Russian update The Board of the Eurasian Economic Commission (EEC) has finally resolved a long-running dispute over how much duty-free bunker fuel can be supplied to a ship as ‘supplies’, Olga Bogacheva reports

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Innovation A new report highlights technologies that could cut fuel consumption by up to 30%

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Equipment & Services Five cruiseship newbuildings are to be fitted with Azipod units and software to maximise energy efficiency

66 - 70

Company News

72 - 73 Diary

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Next Issue


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or some the IBIA dinner marks the beginning of the bunker year. January is a shakedown after the year end break, and from the dinner onwards everything is there to play for. Most anticipate a tough year, with little or no growth in the demand for bunkers, and little to suggest margins will improve in the near term. No doubt there will be further consolidation and rationalisation in our industry. No reason to celebrate but the bunker industry has never lost its ability to party. Our industry continues to be more complex with increasingly intricate hedging tools, more automated measurement, increased cost management and supply chain planning as well as changing environmental regulation and enforcement. Buyers are being offered a greater range of fuel blends, and this will accelerate in 2020 as suppliers seek to offer the lowest cost blends that are hopefully safe and have no more than 0.50% sulphur content. The introduction of lower sulphur fuels, even if predominately distillate based, is unlikely to ease product quality issues with stability and compatibility becoming even more critical in the future. As a result many more of us are seeking guidance and advice on industrywide issues such as how to switch fuels on entering an ECA or switching between new low sulphur blends as well as individual problems relating to a specific ship or stem. Finding lubricants that function well with a range of lower sulphur fuels will also be an issue IBIA must address on behalf of the membership. All competent operators in all areas of bunkering are looking ahead. In all these cases IBIA is providing support. In terms of planning, the implementation of the global sulphur cap in 2020 presents us all with one of the greatest challenges since the transition to coal. The rules are far from set in concrete and IBIA, through our significant presence at IMO meetings and working groups is going some way to ensuring the developing rules are practical, cost effective and based on science and not the whim of one nation or another. World Bunkering spring 2017

IBIA’s intervention not only aims to bring greater practically and commercial awareness to IMO’s deliberations but is further establishing the association as the voice of bunkering, providing a conduit for the membership’s ideas and concepts so they can be considered. We are a long way away from uniform bunkering procedures in every port, but more and more port authorities, bunker buyers and sellers recognise the benefits of such an approach. IBIA, through its Port Charter, which has already captured the support of several of the largest bunker ports, is moving towards this ambition. The growing need for more accurate measurement, improved safety, particularly with new fuels such as LNG and methane, and greater compliance all emphasise the importance and relevance of IBIA’s efforts in progressing this innovative initiative. This in turn presents an obligation for members to bring their issues to the attention of IBIA. Your association can’t provide you with value for the cost of your membership without you communicating with us. The secretariat and board, supported by the various working groups, provide a formidable, unique resource – please use it. We are also becoming the voice for other fuels with the close tie in with both the Society for Gas as a Marine Fuel (SGMF) and more recently the Methanol Institute, leading to unified codes of practice for which IBIA will eventually be a conduit to other organisations, including IMO. At the same time our interaction, both formal and informal, with many other likeminded organisations continues to strengthen including BIMCO, INTERTANKO and the UK Chamber of Shipping to name a few, and most recently the members of the Institute of Bunker Buyers and Consumers has joined the ranks of IBIA, providing further insight into the buying side of our industry.

The past year has seen continued evidence of malpractice in bunkering but also greater awareness. IBIA continues to educate and support efforts to reduce fraud and encourage whistle-blowers. The accelerating take-up of mass flow metering technology is supported by IBIA by providing training and making more participants understand the intricacies and benefits of MFM at conferences and courses. Only a few bunker companies have a well-defined Corporate Social Responsibility (CSR) policy, but as consolidation continues in all sectors of bunkering an increased number of larger companies will come to dominate the mainstream and it can only be hoped that these economies of scale with even more professional management will permit improved and implemented CSR actions. IBIA’s policies and proactive approach will continue under the new stewardship of Justin Murphy as he takes up the reins as Chief Executive during March. His senior management experience in both bunkering and shipping sets him in good stead to continue the growth and influence of IBIA. I take this opportunity to thank Peter Hall for all his dedicated efforts on behalf of the Association, almost doubling our membership in four years and increasing the influence IBIA has on our industry. We wish him well in his retirement.

Robin Meech Chairman 7

chairman’s letter

Growing IBIA’s influence


I

t has been an honour to work with the many organisations and members that make up The International Bunker Industry Association, the world’s only international, professional body that serves all elements of the bunkering industry. I believe our growth and significance depends upon our continuing efforts to develop relationships.

Relationship building At the start of my tenure I presented to the board a vision that was focused on building strong relationships, developing our training and education and influencing and shaping the debate at IMO. To support these objectives we also needed to focus on delivering efficiencies through the application of technology. I believed, and still do, that the impact of environmental regulations is both driving the development of new marine fuels and also the way shipping will transform in the future. This means that IBIA needs to continue to develop its membership breadth on all fronts.

Connecting suppliers, ports and ships There are four key streams: The providers of our future fuels, the fuel users, the ports and the technical expertise that links it all together. We have continued to build and develop these sectors of our membership. In the last few weeks we have signed an MOU with the Methanol Institute and incorporated the Institute of Bunker Buyers & Consumers into the Association. Both these initiatives offer opportunities. Continuing to build on these aspects, IBIA is providing insight into ways of developing bunkering in Egypt at the invitation of the Suez Canal Economic Zone, we will be featuring in Panama in March at the Panama Maritime XIII Conference and Exhibition and in April we are joining forces with the UK Chamber of Shipping to present a forum on “2020: getting down to business” - bringing together these streams. World Bunkering spring 2017

Later this year we are looking at capacity building with a forum in the Caribbean. As well as developing new relationships we need to maintain existing relationships and that is through being relevant to the 900 organisations and individuals that make up the members that we represent. As an association we have an excellent record of membership retention, but we need to guard against complacency we must stay relevant to the people and operations on the ground. In both these aspects we want to continue to develop and deliver benefit and value.

Culture We are at a critical stage of growth and need to emulate successful institutes and associations such as the Nautical Institute and IMarEST. So what do they have as their “hallmarks”? They are professional membership bodies and have a clear brand, through their training, publications and communications and they enable experience sharing and espouse “Good Practice”. In short, their collective information exceeds that produced by the individuals involved. I believe the production of an IBIA good practice manual is long overdue and propose to continue pressing for its delivery.

Passing on the baton At this time of year we have our changes notified with regard to board members, as new members are elected and others step down. The results of the elections will be announced at the AGM and at the dinner and on the website. What we do know is that Steve Simms, who was co-opted to the board in April, is not standing. Steve’s contribution has been very much appreciated, adding an “out of this world” dimension.

We hope Steve will continue to contribute his legal, enthusiastic and unique perspective to IBIA. John Stirling also completes his time on the board, although we hope he will find time to continue his involvement with IBIA’s working groups. John has been a pleasure to work with and I have enjoyed the vigorous debate. On behalf of the membership, IBIA wishes to thank them both for their significant contributions. We also welcome back Robin Meech, Michael Green and Eugenia Benavides as Chair, Vice Chair and Treasurer respectively. Changes to the Bye-Laws and Articles, which are covered on the website, enable Robin and Eugenia to continue in these roles for one more year before standing down from the board. Last but far from least is the news that we have a new Chief Executive; Justin Murphy, a former CEO of both a supplier, Brightoil and a buyer, Teekay. Justin started with IBIA in February and we are working together until the end of March, when I formally step down. The next edition of World Bunkering will feature a profile on Justin. I wish him well and will do everything I can to help in the transition. Finally I want to take this opportunity o thank all the team for their support in taking IBIA through this period. Your loyalty, support and friendship have been really appreciated. I am retiring to spend more time with my family but have every intension of continuing my support of IBIA in the future.

Captain Peter Hall Chief Executive, IBIA

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chief executive’s report

Relationships Key to the Success of the Association


ibia events

Moving swiftly into the New Year 2017 is going to be very busy with IBIA bringing a number of quality events to you throughout the year

I

BIA will partner with a number of industry events hosted around the globe throughout the year, the first being the Middle East Bunker Convention which was hosted in Dubai in January. Representing IBIA were our Board members Robin Meech (Chariman), Nigel Draffin, Michael Green, Steve Simms and Bob Sangiunetti. The year officially begins with the IBIA Board meeting and AGM at the Naval Club in London on the 20th February. This is followed by the prestigious Annual Dinner at the Grosvenor Hotel in Mayfair. We have been well supported again this year and would like to take this oppprtunity to thank our sponsors: Akron Trade and Transport (Platinum); Prax Bunker (Gold); Gulf Petrol Supplies (Silver); BP Marine and Total Marine Fuels (Bronze sponsors) as well as our members for their continued support of this special event. We look forward to hosting around 1000 guest and VIPs for the opening dinner of IP Week. IBIA will also host the Mass Flow Metering for Ship Owners and Buyers at our London office on 22 February, in conjunction with IP week, as well as a welcome drinks evening for our new sub-group, the Institute of Bunker Buyers & Consumers (IBBC), at the Naval Club in Mayfair.

Looking ahead to March, IBIA is pleased to announce that we will be running the Mass Flow Metering Workshop in Panama as part of the Panama Martime XIII World Conference and Exhibition running from March 12-15. We will also have a bunker session in the conference programme. In April the new IBIA Board will have its first annual meeting in London, IBIA Africa will hold its AGM in Cape Town, while in Singapore, the IBIA Asia Gala dinner will be hosted at the Shangri La Hotel on 27 April. There will also be a regional forum in London on April 19 in partnership with the UK chamber of Shipping with the theme “2020: Getting down to business” which engages with refiners, owners, charterers and suppliers to provide an update on what’s happening. Throughout the year the Singapore office will be running a host of courses which include Refresher Course for Bunker Surveyors, Enhanced Bunkering Course, Mass Flow Meeting Workshops and the IBIA Basic Bunkering course. As with our very active Singapore office, our Africa branch will be hosting training in West Africa to support the needs of our members in this locale, as well as supportive and more regional specific courses in Mauritius, and we look forward to hosting a Bunkering Course in December in Cape Town as part of Maritime Week Africa.

Platinum Sponsor

Silver Sponsor World Bunkering spring 2017

We also have the exiting potential development of a Forum in Sri Lanka in June of this year. With London International Shipping Week in September, IBIA will host a forum in London to provide up to date information on what is happening in the bunker industry to meet the 0.50% sulphur limit in 2020. In November, IBIA will host its Annual Convention in Singapore at the Stamford Swiss Hotel conference facility. With the support of our convention partners, Petrospot, the IBIA Convention Committee and the IBIA Asia office in Singapore, we expect this to be a well attended and supported event. The Convention will run from 6 to 10 November, and include training, workshops, a port visit, plenary sessions and ample opportunities at our social events for members to connect. IBIA will be represented at various industry events throughout the year and we may have further plans for IBIA events up our sleeves, so please keep in touch with your regional office and check our website (http://ibia.net/events/) for announcements and updates. We look forward to a year of engaging with our members and meeting with as many as possible over the course of the year.

Gold Sponsor

Bronze Sponsor

Bronze Sponsor

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IBIA Asia Report

IBIA officials and participants at one of the training courses held in Singapore

Š

Full steam ahead at IBIA Asia Regional Manager Simon Neo provides an update on activities since October last year and upcoming training courses

S

IBCON, the world largest bunker conference, was held in Singapore on 5 - 6 October 2016 at the Resort World Singapore Convention Centre. As usual, all the activities taking place during SIBCON meant a very busy week for IBIA in general and the regional office in particular. IBIA had a total of five speakers participating during the two-day conference programme on various subjects. The 2016 SIBCON conference again attracted about 1,600 participants involved in the bunkering industry worldwide.

IBIA Asia Annual Golf Event IBIA hosted the annual golf event at the SICC Golf and Country Club on 7 October 2016, one day after the SIBCON conference. The golf event attracted about 200 people, but the golf tournament had to be postponed due to heavy rain which lasted for about five hours from 7am onwards. That did not dampen our spirits, and we continued with an early lunch and lucky draw.

High spirits at the IBIA Asia golf event

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IBIA Asia golf event

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World Bunkering spring 2017


IBIA Training Courses

IBIA did not forget the less fortunate who want to pursue a career within the maritime industry. IBIA Asia signed a letter of commitment with Singapore Nanyang Technology University (NTU) to provide assistance to at least two students from less privileged backgrounds to undertake maritime studies each year for the next three years. A total of $42,000 has been set aside for year 2017 to 2019 for this purpose, continuing a tradition that has been ongoing for the past several years. In 2016, a cheque of $14,000.00 was also presented to NTU for the bursary during the golf event.

Since moving to our new and more spacious offices in July 2016, we have conducted many training courses and seminars. Our mass flow meter (MFM) training course, and our basic and enhanced bunkering courses have been conducted from within this premises. The MFM training courses and the general bunkering courses were ramped up from twice a month to become weekly from September 2016 onwards, due to the good response from the industry. For the whole of 2016, a total of more than 610 industry personnel went through the bunkering courses with IBIA Asia.

For 2017 we are starting up a new oneday course aimed at the busy executives who want to know more about the MFM system, how it works and its procedures plus processes. Details are available on our website (http://ibia.net/training/) IBIA Asia will also be hosting its Asia Gala Dinner on 27 April 2017 during the Singapore Maritime Week. Details of the gala dinner will be ready by early February 2017.

Simon Neo, IBIA Regional Manager +65 6472 0916 regionalmanagerasia@ibia.net

IBIA presenting Bursary Award to Nanyang Technology University

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Trainees from an IBIA course with Iecturers and IBIA Asia staff

World Bunkering spring 2017

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IBIA Asia Report

IBIA Asia Bursary Award


ibia Africa

A New Year, Training on the Cards Regional Manager Tahra Sergeant outlines IBIA Africa’s plans for 2017

W

ith a quick reflection on 2016, we recognise the challenges and tough economic environment we are all operating in, and are pleased to see that the branch in Africa has seen steady growth and further cemented its relationship with both members, port authorities and governments. There is always room for more growth and engagement and we welcome suggestions from members at any stage. Whilst in Gibraltar for the IBIA Annual convention we had the opportunity to talk through some of the issues and needs with our members from West and East Africa, and this has led us to the creation of a positive programme for 2017. The programme will include workshops, training and more regionalised smaller meetings with members. Venues and dates are being finalised and our website will keep you informed. Training has, and always will be, a great driver for IBIA, and with this in mind we have the following programmes in development within the region:

West Africa: There is a growing need for more support in training for this region, and given the feedback from members we will be running a 3 day intensive programme covering regionalised topics and the IBIA Basic Bunkering Course. We are currently engaging with members to decide dates and topics which would be of benefit to them.

Mauritius: Having last spent time in Mauritius in 2015, we look to 2017 to run a number of courses to support the members in Mauritius and surrounding area. We are planning training in Mauritius in the beginning of May 2017 and shall offer, by request of the members the following courses: World Bunkering spring 2017

• IBIA Introduction to LNG Workshop This half-day workshop is designed to bring delegates up to speed with the technical, operational, practical and safety-related aspects of using liquefied natural gas (LNG) as a source of fuel for ships. It will also cover the commercial issues, including pricing scenarios, and will provide delegates a firm base from which to heighten their understanding of this exciting and rapidly-developing sector of the bunker industry. • IBIA Legal Course This highly professional interactive halfday legal workshop on bunker dispute resolution will address the causes of bunker disputes, the resolution of those disputes when they happen and the avoidance of those disputes so that they don’t happen in the first place. Led by practising maritime lawyers, it will look at how changing economic and regulatory conditions may give rise to new disputes – whether about bunker quality, quantity, delivery or payment issues – and examine ways that such disputes may be resolved. It will also use ‘live’ case studies as tangible illustrations of what can go wrong and how it might be rectified.

In preparation for this we will be sending a questionnaire to the local members encouraging input and feedback on where and how IBIA can further assist our members. Taking this opportunity, we would like to wish all members a positive 2017, and may we all weather it well. I am looking forward to this year and contact with you all. Should you require any further information regarding the Africa events contact:

Tahra Sergeant, IBIA Regional Manager +27 (0)21 412 1593 or tahra.sergeant@ibia.net

South Africa: With Maritime Week Africa being run in Cape Town early December 2017, IBIA will host training as well as an end of year drinks for our members, with further details to be outlined later this year.

Regional Forum: As we do every year, IBIA Africa will be hosting a Regional Forum. This year we plan on hosting the Forum in Sri Lanka, covering all countries bordering the Indian Ocean and increasing IBIA’s footprint in this locale. IBIA Africa invites all its members to join us in Cape Town on 12 April for the IBIA Africa AGM.

Tahra Sergeant

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vivo energy

Vivo Energy

World Bunkering spoke to Nazihah Timol, Marine Business Development Manager at Vivo Energy to find out more about Vivo Energy’s marine activity and priorities for the year ahead.

1) Vivo Energy has expanded its operations around the African continent considerably since its creation in 2011. Can you say what has been behind this expansion? Vivo Energy is the company behind the Shell brand in Africa, established in December 2011 to distribute and market Shell-branded fuels and lubricants. With a strong and growing presence across Africa we source, distribute, market and supply Shell’s world-class fuels and lubricants to retail and commercial customers across the continent. At the formation of Vivo Energy our shareholders committed to invest to grow the business, and have invested significant CAPEX each year to grow and develop the business, enhancing our customer value proposition. This investment has powered growth in both our retail and commercial business, which in turn is helping us progress towards our vision of becoming Africa’s most respected energy business.

and on completion Vivo Energy will be 100% owned by Vitol and Helios.

4) What plans does Vivo have to expand its presence in the African bunker market?

This decision by our shareholders reflects the confidence that Shell has in Vivo Energy as guardians of its brand. It also demonstrates the confidence of Vitol and Helios, who continue to support the growth and development of our business.

We are constantly reviewing our growth plans and of course are looking at a number of markets for expansion. Our intent is clear that we are here to stay. We will ensure we invest in areas that are commercially sound and in line with our clients’ demands. This growth will be organic and we know it will take sound planning and CAPEX investment.

As part of the transaction, a long-term brand licence agreement has been extended to ensure that the Shell brand will remain visible across our markets.

3) How important is the marine fuel sector to Vivo Energy? We see strong potential in the marine fuel sector, and will continue to rigorously grow the Vivo Energy Marine brand across Africa, demonstrating our capability as a physical supplier of marine fuels and the Shell marine lubricants. We are here for the long term and want to give our customers the peace of mind that they have an agile, compliant, reliable and trusted marine partner in Africa.

5) What factors give Vivo Energy a competitive advantage in a difficult market? There are a number of factors which give us a competitive advantage: Firstly we are agile, competitive and dynamic. We want to reach more people and more customers and we’re working hard to expand the Vivo Energy footprint.

2) Recently Vitol and Helios took over Shell’s remaining stake in Vivo Energy, and has kept the right to use the brand. What was the thinking behind this development? Shell has decided that now is the right time to sell its 20% stake in Vivo Energy, and has agreed to sell this to Vitol Africa BV. This deal was announced by the shareholders in December 2016,

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World Bunkering spring 2017


vivo energy

Our marine operations are benefitting from our speed of response and ability to access and distribute fuels and lubricants through established ship owners, bunker traders and resellers. Our dedicated central bunker desk serves as a focal point for all sales enquiries and this channel creates traction for increased response time, agility, market information, customer focus, and more importantly an aggressive sales strategy. Finally, our vision is to become the most respected energy business in Africa. We are working to achieve this in a number of different ways, including: •

• • •

Having the highest of HSSE standards – this is at the heart of our business and is a key differentiator for Vivo Energy in Africa; Showing a demonstrated commitment to our core values – honesty, integrity and respect for people; Offering high-quality Shell products; Operating a results-oriented business culture; Putting an emphasis on local accountability and fast decision making in the countries where we operate; Demonstrating an appetite for investment and importantly a focus on long-term sustainable growth.

6) What assets do you have in the Marine sector to help How does Vivo Energy see the bunker market developing around the African coast? In 2015 we commissioned a new barge, the Gulf Star 1, in Mauritius.

World Bunkering spring 2017

This has supported the development of the growing port supply market, which has seen more and more vessels bunkering at Port Louis. Carrying up to 1,348 tons of Marine Fuel Oil and 370 tons of Marine Gasoil Gulf Star 1 was built in a Turkish shipyard and meets the highest standards of safety and environmental protection. In addition to Gulf Star 1 we have a second barge, based in Cape Verde. With a maximum capacity of 1912 m3 the Cipreia is our double hull bulk fuel tanker, which provides bunkering operations in Cape Verde.

To contact Vivo Energy email at bunker.vivoenergy@vivoenergy.com or visit www.vivoenergy.com

About Vivo Energy Marine Vivo Energy is the company behind the Shell brand in Africa. We source, distribute, market and supply Shell’s world-class fuels and lubricants to retail and commercial customers across the continent. Vivo Energy’s marine team supplies fuels and lubricants to a growing number of private and merchant fleets, as well as naval customers, in the marine sector. Our Pan-Africa network, combined with extensive local knowledge, has resulted in a proven record of developing and delivering innovative and practical solutions for our customers. Vivo Energy aims to build partnerships, rather than just business relationships, with our marine customers, and works hard to

Nazihah Timol

provide them with personal customer service and optimised value at all times. We supply marine fuels as well as a comprehensive Shell marine lubricants portfolio including high-performance diesel-engine cylinder oils, trunk-piston engine oils, environmentally sensitive lubricants and specialist greases. We also provide a range of technical services to help customers achieve maximum value from our products. Marine bunkering operations (fuels and Shell marine lubricants) are available in Cape Verde, Ivory Coast, Madagascar, Mauritius, Morocco, Namibia and Senegal. In addition Vivo Energy sells Shell marine lubricants in the following countries: Ghana, Kenya and Mozambique

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new members

new members Corporate Ship Manager | Charterer

Eugene Siew WT Marine Pte Ltd

Asia finance@wt-holidings.com Supplier (Physical) | Trader

Maureen Leong Straits Bunkering PTE Ltd Asia maureen@straitsbunkering.com

Storage | Broker

Chris Todd Gulf Petrochem Europe chris.todd@gulfpetrochem.com

Supplier (Physical) | Storage

Wilhelm Wasserman FFS Refiners (Pty) Ltd Africa wilhelmw@ffs.co.za

Buyer | Shipowner

Sia Ratajczak Heidmar Europe

Europe helle.graesdal@frontmgt.no

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Jose Tejedor Comport Bahia De Algeciras Europe algeciras@webcomport.com

Buyer | Shipowner

Ben Day EDF Trading

Europe ben.day@edftrading.com Buyer | Shipowner

Ilias Lamprakis K Line Europe ilias.lamprakis@uk.kline.com Buyer | Shipowner

Rob Philips ArcelorMittal Shipping

Buyer | Shipowner

Angeliki Rigos Rigos Marine

Europe angeliki.rigou@rigosmarine.gr

Buyer | Shipowner

Peter Svarrer Maersk

Europe peter.svarrer@maersk.com

Europe Rob.Phillips@arcelormittal.com

Buyer | Shipowner

Buyer | Shipowner

Europe Jonathan.Gillie@navigatorgas.com

Europe elka@elkashipping.com

Buyer | Shipowner

Sotiris Milissis Elka Shipping

Buyer | Shipowner

Helle Graesdal Frontline

Storage | Broker

Buyer | Shipowner

Clipper Group Europe

Jonathan Gillie Navigator Gas

Lauren Miller ST Shipping

Europe Lauren.Miller@stshipping.com

World Bunkering spring 2017


Buyer | Shipowner

Christian Klock Oldendorff Carriers Gmbh & Kg Europe Christian.kloock@oldendorff.com Buyer | Shipowner

Melanie Lew BW Maritime PTE Ltd Europe bunkers@bwshipping.com

individual Services

Maemoto Yoshihiro Marubeni Corporation Africa TSUNEMINE-K@marubeni.com

Serge Zeller Pacific Basin

Europe szeller@pacificbasin.com Buyer | Shipowner

Dan Coughlin ST Shipping

Europe Dan.Coughlin@stshipping.com

Fotini Karali Pantheon Tankers Management Europe fotinikarali@icloud.com

Yvonne Rittfeldt Stena Bulk Europe Yvonne.Rittfeldt@StenaBulk.com

Shani Ghurburrun Port Agency Services Mauritius Africa pmo@portagent.mu

Nestor Abril C I Quality Bunkers Supply S.A.S America (South) ngabril@qualitybunkers.com

Rafael Vidal Transpetrol Chile

Affiliated Organisation

America (South) bunker@transpetrol.cl

Service

Broker | Trader

Asia

Benny Clausen Norwegian Oil Trading AS Europe bc@norwegianoiltrading.no Broker | Agent

Buyer | Shipowner

Services

Supplier (Physical) Ship Manager

Bunker Supplier | Port Buyer | Shipowner

new members

Corporate Additional

Chris Chatterton Methanol Institute

Service

Institute of Bunker Buyers & Consumers (IBBC) Europe

Nils Warner Wallem Shipping Africa new@wallem.com

Trader | Storage Buyer | Shipowner

Lars Malmbratt Stena Bulk Europe lars.malmbratt@stenabulk.com

World Bunkering spring 2017

Satyajit Mohapatra Petco Energy Diesel LLC Middle East satyajit.mohapatra@petcoenergy.com

19


IBIA events

February 20th 20th 22nd MARCH 12th - 15th 15th APRIL 12th

19th 26th 27th MAY 16th 22nd - 26th 22nd - 26th JUNE SEPTEMBER 11th - 15th 11th - 15th 25th 26th - 27th OCTOBER 2nd - 5th NOVEMBER 6th - 10th DECEMBER

London World Bunkering spring 2017

Board Meeting and AGM IBIA Dinner IBIA Training MFM Training for Shipowners and Buyers

Naval Club London, UK Grosvenor House London, UK London, UK

Panama Maritime XIII World Conference & Exhibition with IBIA Bunker Forum IBIA Training MFM Training for Ship owners, Buyers and Suppliers

Panama Panama

IBIA in Africa AGM and Exco Meeting IBIA Board Meeting IBIA Regional Forum Canaries IBIA Forum with UK Chamber of Shipping IBIA Asia Forum (Sea Asia) IBIA Asia Gala Dinner

Cape Town, South Africa London, UK Africa London, UK Singapore Singapore

IBIA MFM workshop with Port of Rotterdam Maritime Week Americas (Petrospot) IBIA Training (Basic Bunker Course English & Spanish)

Rotterdam Miami Miami/Panama

IBIA Regional Forum: Sri Lanka

Sri Lanka

IBIA Regional Forum: LISW IBIA Training MFM and Bunkering Courses IBIA Training: Jamaica, Caribbean IBIA Regional Forum: Jamaica, Caribbean

London, UK London, UK

African Ports Evolution IBIA Bunker Training

Durban, South Africa

IBIA Convention

Singapore

Social Event: Singapore, Asia Social Event: London, UK Social Event: Africa

Singapore, Asia London, UK Cape Town

Gibraltar

Jamaica, Caribbean Jamaica, Caribbean

Singapore

Cape Town 21


notice board

IBIA Noticeboard

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non-me r £80 dep to buyer Please note £45, £60 o g in rl te are offered S e s n d zi n a u g o a P f m o the at a cost e copies of ls. ditional fre their vesse to g in Up to 20 ad rd a rw fo r fo f IBIA gazine – members o kering Ma n u B d rl o ith savings IBIA W vertising d members w r a fo n o le b a ts il n a Advertising discou s are av contact the rtising rate se ve a d le a P d . te ze n 86 6100 ment si Discou e advertise 44 (0)20 73 th + n n o o t n n o e d d n depen e Media Lo at Maritim d Sales Team website an embers to our new M n o f g o d t lo e n is se g L IBIA is desi rrect, plea w website ils are not co age. The ne p rs rmation. e If your deta b fo m in e eir own n your m th o e g m n e a th ch e updat ccess and . can easily a IA members so members ailable to IB av ly n o is n tio nding This publica In-Line Ble ers to e id u G IBIA to memb e of charge e fr esolving le b a il Ava ing and R id o v A to IBIA Guide tes e report free, but th pu y is p D co r l a e n k o n Bu their pers ers receive at £50. IBIA memb n-members o n to le sa r is offered fo

22

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

IBIA Glossary of Bunker and Lubricating Oil Terminology A comprehensive guide to all those complicated terms that are in daily use in the bunkering industry. For sale to non-members at £45.

IBIA Guide to Good Commercial Practice On sale to non-members at £50 per copy.

IBIA Safety Cards for vessels’ crews IBIA buyer members receive copies of the IBIA Safety Cards for distribution to their ships, giving basic, plain English advice about safe handling of bunker fuels. Please note that all of the above publications can also be downloaded by members by visiting www. ibia.net and logging into your account. Please then go to the download section of the website.

IBIA Logo Free bromide supplied for use by corporate members only.

World Bunkering spring 2017


interview

View from the bridge

Captain Peter W Hall talks to Unni Einemo about his term at the helm of the International Bunker Industry Association

C

aptain Peter W Hall became Chief Executive of IBIA at the start of April 2013 after a period of flux in the Association’s leadership. He took over from Cliff Brand, who held the position for less than half a year before leaving for another career opportunity. Prior to Brand’s appointment, UK-based maritime arbitrator and long-standing IBIA board member Trevor Harrison acted as part-time Chief Executive for IBIA, after its longest serving CE Ian Adams resigned from the role with effect from 31 July 2011. Now, as Peter is looking to retire from the role, we have dedicated the World Bunkering industry interview to our outgoing chief executive who has served IBIA with vim and vigour.

UE: Let’s look back a bit. I’m curious as to what extent you were familiar with the bunker industry and IBIA prior to applying for the role as CE, and what was your impression of the bunker industry and IBIA? PH: I thought I was fairly aware of the industry, as I had been at sea for many years and being in a port environment in Bristol responsible for oil and gas terminals management. Bristol also regularly bunkered the bulk carriers that discharged at the bulk terminal. But in reality it was only the tip of the iceberg, let’s say I knew the principles.

It was Dawn Barley (of World Bunkering) that explained to me about the association. She was a great ambassador for IBIA, always “walking the talk” both across the industry and the association. My impression of the industry was a one that had examples of good practice, but they were not universally applied. I now realise that the standards and co-ordination delivered in Gibraltar are certainly not universal.

UE: What made you apply for the job as CE of IBIA, and was the role what you expected? PH: It offered a change from running a port, but also presented the opportunity to build upon a lot of my recent experience, gained from being in charge of a major bunkering port.

I believed and still do that the marine fuels industry is at such a point and is about to undergo a quantum step change, akin to when oil replaced coal 100 years or so ago. This is an exciting yet challenging prospect that will affect the marine industry for decades to come and I wanted to play a part in shaping the future on this. Also from a personal perspective with part of my family resident overseas, it offered the opportunity to see them more often and I enjoy travelling and meeting people from different cultures and countries.

UE: Did your impression of the bunker industry and IBIA change after taking up the post?

Prior to running Gibraltar port, I was involved in port development and management at The Bristol Port Company. It was there that I appreciated the need to look for new ways of doing things, innovation and adopting solutions from other industries. The cutting edge challenge of pioneering alternative solutions and being ready to capitalise on the changing scene, this to me was an exciting prospect.

It was not until I moved to Gibraltar port that I started to learn about the business in detail and some of the challenges the industry faced. As far as IBIA was concerned, again it was only when I started in Gibraltar that I became aware of the association, it just wasn’t on my radar and curiously not mentioned in the Ports and Harbours circles. However, the benefits of a member of the association were quickly apparent and so I joined.

World Bunkering spring 2017

Captain Peter W Hall

23


interview

PH: The big picture didn’t change but when you get the opportunity to look up close at the detail the perspective changes. Perspective can be driven by information, and information can be assumed to be something it’s not. Let me explain this with an example: You are told you have a coach and 4 horses. You would assume the horses are harnessed together in pairs facing in the same direction. It is only when you get up close, you understand the reality can be very different. It could turn out that the horses are tied to each corner and pulling in different directions!

The association is like a family of all different ages; ranging from children that need to be nurtured and crave attention all the way up to the older generations who add sage comments and observe that “it wasn’t done like that in my day”.

UE: What do you see as the main challenge for IBIA going forward?

Internally, the horses need to be aligned, because externally the impression needs to be a sleek, efficient international association that can deliver effectively and take part in discussions at the global table. The challenge is seeing IBIA for what it is, and to release and realise the association’s potential.

UE: Hardly any job is ever plain sailing, and there are always ups and downs. What have your main frustrations been in your role as CE of IBIA?

UE: What did you see as the biggest challenges for the Association when you took on the role, and are they much the same now?

UE: IBIA’s membership, activities and influence has grown rapidly under your leadership, which you must be very proud of. How did this happen, and do you see this as your greatest achievement for IBIA?

PH: Yes the same challenges exist for the association as they did 4 years ago, and that is “growing pains”. As more is delivered more is expected, and as our membership becomes more diverse and international those expectations and requirements also grow and change, which IBIA has to accommodate. The changes in principle are not the problem it’s in the detail that challenges manifest.

PH: I am pleased that increasing influence and growth have taken place. This is down to a first class team and hard work; and it takes all types of skills to deliver it. The teams I have worked with have been top class and I will miss their support, efforts and friendship. You ask how did this happen? In simple terms, I believe in connecting people to change lives, and empowering them to do it.

PH: Diversity and fragmentation, IBIA needs to build on its position as the voice of the industry and embrace and engage with the changes, remaining relevant.

PH: Running an association is very different to running a business, or even a charity or voluntary organisation. The diversity of opinion and perception of what IBIA should be like is both a frustration and a challenge. I hope with the Blue Sky strategy initiative started last year we have a better understanding of the purpose and destination.

UE: You brought some stability to the management of IBIA but there have been many changes to the teams around you with regards to the Secretariat in the UK and Asia. How has this impacted on IBIA’s work?

Peter’s fondest memory is a visit to Lawhills College in South Africa

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World Bunkering spring 2017


interview Peter’s fondest memory is a visit to Lawhills College in South Africa

PH: In the short term it has retarded performance, but I would like to think it’s giving IBIA greater potential. If I can draw on an analogy of a football team, you need to bring in new players not to maintain where you are, but to compete at a higher level. That transition does cost, but with good signings you are able to move up the league. I believe our Asia team is significantly stronger and delivering greater benefit to the region. Again in the UK our communications and impact at IMO has taken on another dimension. There are more signings on the way.

UE: We are living in interesting times for the bunker industry with change driven by environmental regulations and technology developments. Where do you see IBIA as having the most critical roles to play, and how should IBIA help its members in managing these changes? PH: We have to be at the centre of the debate, and we need to be listening to those at the extremes of the debate so that we can shape our response from an all-embracing position. We are gaining credibility and influence. In effect we need to be an intelligent customer and know what to ask for and translate that to our membership and then advise them on what the impacts mean. Our critical role is understanding, communicating the impact, and help connect with tried and tested solutions that not only add compliance but actually deliver efficiencies.

UE: Peter, you have served IBIA with tremendous loyalty, energy and enthusiasm and it is hard to imagine that you can just walk away from it all. From what I understand, World Bunkering spring 2017

although you are planning to retire from the CE role, you intend to remain involved with the Association’s activities. Tell us a bit about which areas you hope to continue to develop with IBIA. PH: I hope less is more, one of my frustrations is that I have had to spread myself too thinly. The key areas I want to stay in touch with are port development, in particular developing the Port Charter initiative, as well as developing Guides to good practice and apply technology to help implementation.

UE: What skills are needed to run the Association, and do you have some good advice for to your successor? PH: You need diplomacy, adaptability, stamina and enthusiasm plus the normal CE- level skills. My advice would be recognising Rome wasn’t built in a day; the role is a marathon and not a short distance race. Expectations can be a killer, so accept disappointment. Don’t become disappointed because there are too many good things in life to let the bad ones bring you down. Celebrate the successes.

UE: By the time a new CE is in place, your term will have lasted four years. What, for you, have been the highlights of this period and what are your fondest memories? PH: Highlights have been to see: •

Training becoming a fundamental part of IBIA’s operation. 800 people have been trained through an IBIA scheme in 2016-2017. Over 100 IMO delegates listening to an IBIA briefing.

IBIA being asked by countries to help with marine industry development and capacity building. • The launch of the Port charter espousing quality, quantity and transparency in port industry. • The move of the office from Southampton to London and being part of the largest maritime community in the world. • Increasing IBIA’s membership, influence and impact. My fondest memory is a simple one, visiting Lawhills College in South Africa and hearing the aspirations and dreams of the young people from the townships with regard to being part of the marine industry.

UE: Finally, what will you fill your time with when no longer working full time (and then some) for IBIA? PH: I want to remain involved with port development and applying technology to enable “working smarter not harder” and as an IBIA member I would like to contribute to the work groups and other initiatives. I will continue my involvement with helping in the community, through my role in church leadership as well as on the international scene, providing medical care on board ships around the world through an enabling charity, the Vine Trust. I am also engaged in becoming a magistrate which is likely to take up a couple of days a month. On a more leisurely scene my wife and I plan to spend more time with our grandchildren and my son and daughter in law in Australia. Plus my brother-in law has a 42 foot sailing boat and needs a hand in the summer.

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industry news

Institute of Bunker Buyers & Consumers joins IBIA Boost for both organisations, giving buyers a stronger voice within the global bunker industry association

T

he International Bunker Industry Association (IBIA) and the Institute of Bunker Buyers & Consumers (IBBC) have announced that IBBC will become a sub-group of IBIA. The IBBC is a forum and business network for marine fuel purchasers to discuss general experience in relation to day-to-day marine bunker fuel procurement tasks, regulatory changes and commercial developments within the bunker market. Formed in July 2015, IBBC is an emerging organisation whose members have already held a series of meetings, but it hasn’t yet communicated its thinking on issues outside the group. By integrating with IBIA, the IBBC members expect IBIA to provide a conduit in which consolidated messages can be passed to suppliers and other entities. IBIA Chief Executive Peter Hall commented: “I’m delighted that the IBBC has decided to join IBIA and I believe this will be a boost for both organisations. It will give buyers a stronger and more effective voice within the industry through IBIA, while at the same time increase IBIA’s membership,

strength and influence. The IBBC having a dedicated group to discuss their concerns within our global bunker industry association will further IBIA’s aims of representing all industry stakeholders and having more buyers within our ranks will be very beneficial to all.” Among the aims of the IBBC is to develop general best practice standards which relate to the whole marine bunker fuel procurement industry. Hall added: “This fits perfectly with IBIA’s ethos and activities of supporting industry best practices through education, information, and development of standards in collaboration with relevant stakeholders. For example, IBIA is part of an International Maritime Organization correspondence group on fuel quality seeking to identify best practice guidance globally for fuel purchases.” An IBIA statement noted that IBBC will continued to organise bunker buyer specific events to discuss their particular concerns, but “by being part of IBIA, their concerns can be better heard and understood to form part of IBIA’s overall efforts to address industry issues”.

World’s largest hybrid vessel planned Color Line and Ulstein Verft have signed a letter of intent (LOI) for the construction of what would be the world’s largest hybrid vessel. “This is an important milestone for us, and we are very pleased that we have been chosen as partner in this very exciting project. We are looking forward to the further cooperation with Color Line,” said Ulstein CEO Gunvor Ulstein . The 160 metre, 2,000 passenger/500 car capacity vessel will be designed by Fosen. She is expected to enter service on the Sandefjord-Strömstad route in the summer of 2019. The ferry is a plug-in hybrid, where the batteries are recharged via a power cable with green electricity from their own shore facilities or recharged on board by the ship’s generators.

Smaller ports are “key to physical supplier success” Growing concentration of fuel supply in major bunkering hubs will continue towards 2020, and offer only increased competition and low margins, according to industry expert Adrian Tolson.

Color Line hybrid vessel for construction at Ulstein Verft

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World Bunkering spring 2017


He asserted: “Rationalisation is the byword in today’s bunkering industry and major physical suppliers, just like major bunker traders will have to get used to this. Traders are seeing their share of the market shrink and physical suppliers are seeing their supply volumes erode as they rationalise away from the low margin, larger supply locations. The right strategy for independent physical suppliers will be to ensure that they have the expertise and flexibility to recognise, and then quickly move into the smaller, higher margin markets. Those that do will reap the rewards.”

“Physical suppliers need to stay away from major bunkering ports, unless there is a specific niche opportunity or there is a desire to run a logistics operation that is more focused on barging, rather than bunkering economics,” he said.

Singapore launches surveyor licence scheme The Maritime and Port Authority of Singapore (MPA) has issued 51 companies with bunker survey licences to operate in the Port of Singapore.

MPA says the mandatory licensing scheme will raise the standards of bunker surveying companies and allow the authority to have greater regulatory oversight of bunker surveying companies and bunker surveyors. The move came as the world’s biggest bunker port announced total bunker sales for 2016 of 48.6 million tonnes, up from 45.2 million tonnes in 2015.

20|20 Marine Energy believes that physical suppliers should concentrate their efforts and resource on supply locations that provide a true return for their expertise and the genuine value that they can provide to ship owners and operators. This means capitalising on supply locations that are too small, or too complex for a cargo trader, and where the logistical margin exceeds the benefit of fuel cost minimisation. The growing concentration of supply in major bunkering hubs is a trend that will increase as the market moves into a post-2020 supply environment. Supply locations that lose volume to this trend, and those that have trouble meeting 2020 supply specifications, will likely become ideal supply locations for the physical specialist.” Tolson advised that physical suppliers should leave the major ports for the refiners, cargo traders and those who had an obvious competitive advantage and could focus on fuel cost minimisation and shaving margins to a point where only the best blenders and cargo sourcers can make money. Adrian Tolson

World Bunkering spring 2017

27

industry news

The senior partner at 20|20 Marine Energy added that, with continuing tight margins, and extreme competition, specialist physical suppliers were being squeezed out of traditional, large bunkering ports, or reduced to providing just credit facilities and logistics services.


industry news

A busy scene at the bunkering anchorages off Gibraltar. ©Gibraltar Port Authority

“The Singapore Shipping Association (SSA) welcomes this initiative by MPA to license the bunkering surveying companies. We are confident that the licensing of bunker surveying companies will reassure buyers and sellers that Singapore’s bunkering industry is well-served by trained and certified professionals – this initiative, together with the mandatory implementation of mass flow meters (MFMs), demonstrate MPA’s commitments towards promoting Singapore as a premium bunkering hub,” said S K Lim, Chairman of the SSA Services Committee. Meanwhile, Singapore-based New Ocean Maritime Pte Ltd has been fined a total of $81,000 (US$57,000) for providing services in the port of Singapore without a bunker craft operator licence between 3 January 2015 and 28 March 2015. New Ocean Maritime Pte Ltd was also found to have used the bunker craft operator licence that was issued to Seaquest Tanker Pte Ltd for providing services in the port. Seaquest Tanker’s bunker craft operator licence was revoked by MPA on 26 April 2016 for the company’s involvement with New Ocean Maritime. Investigations showed that its actions had breached the terms and conditions of the licence. The MPA says it “adopts a zero tolerance approach towards bunkering malpractices and will not hesitate to take action against any unlicensed entity operating in the port of Singapore”.

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Gibraltar’s “year of growth” The Gibraltar Port Authority (GPA) announced that most areas of activity grew in 2016. Against the backdrop of a slowdown in global economic activity, overcapacity in shipping across the world, and stiff regional competition, the GPA reported, for the second consecutive year, an increase in both the number of vessels calling at Gibraltar for bunkers and in the quantity of fuel delivered. However, as a matter of policy, Gibraltar no longer makes public its bunker volume figures. The GPA said that the positive trend was reflected more widely in the total number of all vessels calling, including cruise ships and superyachts. An increasing number of superyachts have also taken advantage of the new berths at the recently commissioned Mid Harbour Marina to extend their stay on the Rock. There was also a rise in ship-to-ship transfers in the bay, off port limit transfers, and in occupancy rates at the Eastern Anchorage, “reinforcing the port’s aspiration to deliver the widest range of services in keeping with its reputation as a maritime centre of excellence”. The British Overseas Territory’s Minister for Maritime Affairs, Gilbert Licudi, added: “This is great news for Gibraltar, particularly against the backdrop of a challenging year for global shipping. The positive trends reflect the outstanding work of the GPA to further improve efficiency in the harbour,

and to relentlessly pursue its marketing and engagement strategy. It is also testament to the solid partnership across the wider port community in Gibraltar, and to the invaluable drive and support of the shipping agents, bunker suppliers and other service providers.” CEO and Captain of the Port, Bob Sanguinetti, commented: ”After hosting a hugely successful, high profile international bunker convention in Gibraltar last November [the IBIA Convention], it is very pleasing to reinforce our status as a premier maritime hub in the Mediterranean with such positive annual results. I look forward to continuing to work very closely with our valued partners across the shipping community to ensure that the positive trend of these past two successful years endures into the future.”

Tokyo exchange launches bunker contracts The Tokyo Commodity Exchange (TOCOM) has launched an “oil physical market as a concurrent business of a commodity exchange”. Trading was launched in January and included contracts for gas oil, bunker A and low sulphur bunker A (LSA) for delivery by barge or at a refinery. TOCOM said in a statement: “Execution prices will be used to determine the settlement of cash-settled oil futures contracts slated for listing in May 2017 at TOCOM.”

World Bunkering spring 2017


Danish bunker company Monjasa says it will appeal a criminal conviction of fraud handed down in September by a Danish court. Monjasa’s identity was not revealed by the court until December. On 22 September Monjasa was found guilty of fraud against one of its customers, Malaysian Pacific Inter-Link, and was fined US$1.5 million in penalties. The company’s CEO, Jan Jacobsen was also convicted of fraud and sentenced to three and half years in prison. A second senior executive was found not guilty. The court was reported by Danish on-line news provider ShippingWatch as saying in a statement that the total amount involved in the fraud, committed over a period of three years, was US$3.6 million.

“We are very surprised and completely uncomprehending of the verdict. We think that we disproved the charges point by point and we can’t see that there is any evidence which could lead to this ruling. So, naturally, we decided to appeal the city court’s verdict on the spot,” Monjasa’s lawyer Jacob Skude Rasmussen, of Gorrissen Federspiel, was reported as saying after the verdict was handed down.

More environmental discounts at Gothenburg One in three ships calling at the Swedish port of Gothenburg received an environmental discount on the port charges during 2016, an increase of 83% on the previous year. Heading the discount list are Donsö-based shipping companies Tärntank Ship Management and Furetank that run LNG-fuelled vessels. In total, 75 vessels received a discount of 10% on the port charges compared to 41 in 2015.

Edvard Molitor, Environmental Manager for Gothenburg Port Authority, said: “The growing number of vessels classified as green is highly encouraging. They are also vessels that call at the port on a regular basis.” The discount is based on two separate environmental indexes, the Environmental Ship Index and the Clean Shipping Index Vessels that have a score of at least 30 according to ESI, or that are classified as green according to CSI, receive a 10% discount on the port charges. An additional discount is available for vessels that run on LNG, which receive a 30% discount each time they call. In 2016, two vessels received the maximum discount, the Ternsund and Fure West, owned by Donsö-based shipping companies Tärntank Ship Management and Furetank.

Gothenburg is handing out more environmental discounts. ©Port of Gothenburg

World Bunkering spring 2017

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industry news

Monjasa appeals fraud ruling


environment

IMO begins work on 0.50% sulphur limit implementation plan Unni Einemo reports from a January meeting which considered what needs to happen to ensure a successful transition to the 2020 sulphur regime

I

n just under three years from now, the world’s coastal populations should be able to breathe a little easier as emissions from ships will be cleaned up dramatically, thanks to the decision taken at the Marine Environment Protection Committee (MEPC 70) of the International Maritime Organization (IMO) in October 2016. Unless, of course, the 0.50% fuel sulphur limit isn’t implemented successfully. Recognising that this could be a challenge, MEPC agreed to invite proposals to the January 2017 session of the SubCommittee on Pollution Prevention and Response (PPR 4) to identify “justification and scope for a new output on what additional measures may be developed to promote consistent implementation of the 0.50% global sulphur limit,” and report back to the next MEPC session. A “new output” means adding items to the IMO’s agenda that require a result.

Unless there are government or commercial incentives for ship operators to start purchasing more expensive 0.50% sulphur fuels well ahead of 1 January 2020, this shift will need to take place during a very restricted timeframe. That could create problems: with initial availability; huge price pressure on compliant products; bottlenecks in scrubber installations at the end of 2019; and a risk that some of the fuel blends on offer may be unsuitable for marine engines.

Identifying the issues

The decision taken by MEPC in October last year was based on an official IMO study concluding that there will be sufficient refinery capacity in 2020 to provide both the marine industry and the world in general with low sulphur fuels. Even if that were theoretically the case, IBIA (and others) think the nature and enormity of the shift may cause some of the problems outlined above to manifest themselves.

Views on what the potential problems with introducing the 0.50% sulphur limit are, and how to address them, diverge. IBIA has consistently pointed out that the transition from the 3.50% to the 0.50% sulphur limit is a huge undertaking for the global refining and marine fuel supply industry.

Hence, IBIA put a proposal to PPR 4, which was introduced in plenary with these words: “While we are confident that the marine fuel supply industry and abatement technology providers will do their utmost to get the required products to the market on time,

30

it seems prudent to put in place contingency measures to deal with potential problem areas. To this end, IBIA’s paper, PPR 4/20/6, outlines areas which we believe will require attention to overcome initial transitional challenges without unduly penalising ships for circumstances outside their control. We have also outlined some ideas for ways to address transitional issues and ensuring the regulation is implemented evenly and consistently, while keeping the regulation’s environmental benefits firmly in mind.” There are many who share these views, but there are also a number of countries that refuse to acknowledge that the transition may be challenging from a supply standpoint because the IMO study and the MEPC 70 decision has “proven” that availability will be there. Besides, the transition won’t be sudden because we have three years to prepare, the argument goes. In any event, these countries will not accept any suggestions for easing the transition that in any way may fall short of full, strict global implementation and compliance with the new sulphur regime from day one.

World Bunkering spring 2017


The scope of the work proposed by PPR 4, which need to be completed during PPR sessions in 2018 and 2019, includes: •

• PPR 4’s draft justification for a new output which will be sent to MEPC 71 also includes a point about how inconsistent implementation of the 0.50% sulphur limit would increase the difficulty for the marine fuel supply chain to plan effectively to meet global demand and for ship operators to assess the viability of investing in exhaust gas cleaning systems.

The draft justification also mentions the need to mitigate concerns about fuel quality and safety.

Broad scope In order to prevent discussion at PPR 4 from getting bogged down in detail and end with no agreed proposal for a new output to send to MEPC, the scope was deliberately drafted to be broad and general with wording that doesn’t preclude or exclude specific measures, apart from a call to develop a standardised format for reporting non-availability of compliant fuel. Several documents submitted to PPR 4 had concrete suggestions for specific measures that could be included in the scope, including IBIA’s paper, and while there are some clear opinions forming on their pros and cons, so far all ideas remain on the table.

Considering the preparatory and transitional issues that may arise with a shift from the 3.50% sulphur limit to the new 0.50% limit; Considering the impact on fuel and machinery systems that may result from the use of fuel oils with a 0.50% sulphur limit; Considering verification issues and control mechanisms and actions that are necessary to ensure compliance and consistent implementation; Developing a draft standard format (a standardized system) for reporting fuel oil non-availability that may be used to provide evidence if a ship is unable to obtain compliant fuel oil; Developing guidance, as appropriate, that may assist IMO member states and stakeholders in assessing the sulphur content of fuel oil delivered for use on board ship, based on the consideration of mechanisms to encourage verification that fuels supplied to ships meet the specified sulphur limit as stated on the bunker delivery note; Requesting ISO to consider the framework of ISO 8217 with a view to keeping consistency between the relevant ISO standards on marine fuels and the implementation of regulation 14.1.3 of MARPOL Annex VI; and Considering any consequential regulatory amendments and/or guidelines necessary to address issues raised or otherwise considered necessary to ensure consistent implementation of regulation 14.1.3 of MARPOL Annex VI.

Quick fix? With such a broad scope, a lot remains to be done to work out the specifics. The desirable outcome is for the entire global fleet to be using either low sulphur fuels or technologies that achieve equivalent emissions reductions from the start of 2020, and find ways to ensure this will implemented in an effective, fair and safe manner, including dealing with potential hiccups such as a genuine shortage of compliant fuels in some regions. Some think we should just implement a ban both on the carriage and sales of high sulphur fuel oil (HSFO) to ships unless that ship has a scrubber (or approved exemption) from the start of 2020 to make the MARPOL Annex VI regulation as simple as possible to implement and enforce. Included in this idea is that suppliers would be required to see evidence that the ship has an approved scrubber or exemption (e.g. check the ship’s IAPP certificate) before being allowed to sell HSFO to any ship. In some respects, we are already halfway there with the new format for the supplier’s declaration on the bunker delivery note approved at MEPC 70, which allows the supply of fuel exceeding MARPOL sulphur limits on the basis of the supplier receiving notification that the ship has a scrubber or a valid exemption. Simplicity may seem very attractive, but is it wise to paint the industry into such a tight corner while the paint is still wet? Is there a risk that such a ban could prevent a ship from leaving a port because it cannot source enough compliant fuel to reach its next destination? Or will filing a non-availability report be sufficient protection for the ship and supplier to go ahead and bunker non-compliant fuel? IBIA has played an active part in the IMO discussions on the 0.50% sulphur limit, and consulted its members, other industry organisations and member states on the issue, and intends to continue to do so. If you have something to add to the debate, you can contact IBIA’s IMO representativeby email:

unni@ibia.net

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There is, however one element that all parties at PPR 4 were able to agree on as justification for adding a new output to the IMO’s agenda. Due to the magnitude of the operational cost increase this regulation will lead to, without uniform implementation, compliant operators would be at a huge commercial disadvantage and it would be impossible to ensure a level playing field. This could result in the intended environmental benefit being weakened or lost.


environment

Undermining IMO? IMO chief warns EU against taking unilateral action on greenhouse gas emissions from shipping

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n an unusual intervention, signalling the depth of concern at IMO over the proposed extension of the European Union’s Emission Trading System (EU-ETS) to shipping, IMO Secretary-General Kitack Lim has warned senior EU official such a move would undermine IMO’s work on emissions. In a letter to Martin Schulz (President of the European Parliament), Jean-Claude Juncker (President of the European Commission) and Donald Tusk (President of the European Council), Lim acknowledged that the EU had an ambitious policy for addressing emissions and recognised that Member States might wish to enhance the progress made to date. However, he cautioned against extending the EU-ETS to include ships. Lim wrote: “I am concerned that a final decision to extend the EU-ETS to shipping emissions would not only be premature but would seriously impact on the work of IMO to address GHG emissions from international shipping. Inclusion of emissions from ships in the EU-ETS significantly risks undermining efforts on a global level.” The letter follows an agreement on 16 December 2016 by the European Parliament’s Environment Committee that emissions from ships should be included in the EU-ETS from 2023, if IMO does not deliver a further global measure to reduce GHG emissions for international shipping by 2021.

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Shipping representative organisations had already expressed dismay at this decision while some environmental campaign groups strongly supported the move. In 2011, IMO became the first international body to adopt mandatory energy-efficiency measures for an entire industry sector with a suite of technical and operational requirements for new and existing vessels that entered into force in 2013. Then in October 2016, IMO’s Marine Environment Protection Committee (MEPC) adopted a system for collecting data on ships’ fuel-oil consumption which will be mandatory and will apply globally. This will be the first in a three-step approach leading to an informed decision on whether any further measures are needed to enhance energy efficiency and address GHG emissions from international shipping. If so, policy options would then be considered. IMO also approved a ‘roadmap’ for developing a comprehensive strategy on reduction of GHG emissions from ships, which foresees an initial GHG strategy being adopted in 2018 and final one in 2023. These measures were agreed, by consensus, by IMO Member States, including EU Member States. In his letter, Mr Lim said this not only demonstrates IMO’s leadership and role as the global body for developing and implementing requirements for international shipping, but also reaffirms that IMO is the only appropriate body to take this work

forward and achieve the necessary political cooperation of all governments represented at IMO, including EU Member States. He added: “Such political cooperation is important to ensure that all countries act together to ensure that no one is left behind.” Lim said that, in his view, unilateral or regional action that conflicts with or undermines actions that have been carefully considered and deliberated by the global community at IMO threatens world-wide confidence in the consistent, uniform system of regulation developed by IMO. Regional or unilateral action, he said, would harm the goals of the wider international community to mitigate global GHG emissions from ships and be at odds with the overarching objectives of the Paris Agreement. The 2015 Paris Agreement makes no reference to emissions from international shipping, due to the global nature of the sector and the difficulty in allocating emissions from a ship to a single state. However, Lim stressed, IMO’s work on the control of GHG emissions shows that strong action is being taken. IMO is continuing towards the goal of a fully global solution for international shipping, achieved through cooperation among all its member states – including EU members.

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The IMO chief’s intervention drew a strong response from the Clean Shipping Coalition (CSC), a group of NGOs with observer status at the UN’s International Maritime Organisation (IMO). John Maggs, CSC president and shipping advisor to Seas at Risk, said: “The challenge of meeting the objective of the Paris Agreement is so great that it will require action at all levels. There is nothing that says action can only take place at IMO and indeed it would be counterproductive to concentrate only on the development of IMO measures, when processes there are often subject to delay. The IMO’s criticism of EU action is unfortunate and we call on Mr Secretary-General to take stock and press IMO members to urgently agree targets and measures at a global level.” Faig Abbasov, clean shipping officer at Transport & Environment (T&E), a member of the Clean Shipping Coalition, said: “It is wrong for the head of the IMO to condemn the European Parliament’s actions, when it has the direct legitimacy of European citizens, and is working hard to protect those citizens from the impact of shipping’s ever-increasing contribution to climate change. We are not aware of Mr Lim writing to those countries and industry bodies that have consistently been blocking progress on ship GHG emissions at IMO for years; it appears as if he is siding with them now.”

There is however an issue of timing. If the EU did follow its Parliament’s Environment Committee recommendation - and that still requires agreement by the Parliament’s plenary, the Commission and the Council - the decision to include shipping in the ETS would be taken in 2021 while IMO has committed to adopting a final strategy in 2023. The day after the committee’s decision, and prior to Lim’s intervention, the global trade association for shipowners, the International Chamber of Shipping (ICS), issued a strong critique of the EU proposal. It said that a unilateral decision by the European Union to incorporate international shipping into its regional Emissions Trading System (ETS) would polarise and impede current discussions on additional CO2 reduction measures at IMO. “Non-EU nations will be disappointed and very concerned by yesterday’s vote in the European Parliament Environment Committee following IMO’s adoption just a few weeks ago of a comprehensive road map for action,” said ICS Director of Policy and External Relations, Simon Bennett. “But we hope that EU governments and the European Commission will see sense and recognise that threats to their trading partners will not serve the development of the global solution which both they and the shipping industry want and need.” Bennett continued: “ICS is confident that IMO Member States, most of which are developing nations, will adopt a CO2 reduction strategy in 2018 that will include ambitious CO2 reduction goals and the development of a mechanism for delivery. But threats of EU unilateral action will do nothing to help this complex process.”

ICS says that emissions trading, which has been developed primarily for industries such as power generation and cement and steel production, is completely inappropriate for international shipping which mostly comprises small and medium sized enterprises, typically operating less than 10 ships. “The EU ETS has been an abject failure. Its unilateral application to global shipping would create market distortion while generating trade disputes with China and other Asian nations, as happened when the EU tried unsuccessfully to impose its ETS on international aviation,” said Bennett. The position of ICS is that if IMO member states should decide to apply a market based measure for CO2 reduction to international shipping, the preference of the industry would be for a global fuel levy. The shipowners’ body says that shipping fully accepts responsibility for reducing its CO2 and building on the 10% reduction already achieved by the sector during the last five-year period for which IMO data is available (2007-2012). But it asserts that if IMO decides to develop a fuel levy, this would require the full support of developing nations which are worried about the potential impact on trade and economic development. “Even if market based measures are found necessary to achieve the objectives which IMO sets for the sector, threatening non-EU partners with unilateral action is not going to help them to overcome their legitimate concerns. The only forum in which to have this debate is at IMO,” said Bennett.

A CSC statement says: “The decision taken last month by the Environment Committee of the European Parliament includes a compromise provision, which will see shipping included into the EU ETS from 2023 only if the IMO fails to deliver a global agreement deal. This global deal is what IMO promised at a meeting (MEPC70) last October with the adoption of its GHG roadmap. It begs the question, to what extent does the IMO have faith in its own promises?” IMO Secretary-General Kitack Lim ©IMO

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A decision by the IMO Council, at the beginning of December 2016, to authorize two additional meetings of a special MEPC Working Group on reduction of GHG emissions from ships during 2017 (the first to be held 26-30 June) will enable further progress, and illustrates the importance and urgency IMO attaches to this issue. In parallel, IMO will continue its efforts to provide related assistance to developing countries through major capacity-building projects on energy efficiency in ship operations.


traders

A big players’ market The bunker market is set for fundamental changes as consolidation in liner shipping adds to the challenges facing traders

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n three years’ time the bunker industry will find itself sailing into uncharted waters when the 0.50% sulphur limit becomes mandatory outside Emission Control Areas (ECAs). Dealing with the challenges of what could be a highly volatile and confused market is likely to be a massive challenge for all parts of the industry, including traders – at least for those who make it to 2020. In December, giant fuel trader World Fuel Services (WFS) predicted that the new global sulphur cap would “turn the whole bunker industry upside down”. It urged the shipping, bunkering and energy sectors to work together to meet this new challenge.

In other words it becomes more and more a big players’ game. Or as WFS put it: “A global organization such as WFS does not just extend credit, it also provides credibility. Fuel buyers can have confidence that they are dealing with a partner who, with extensive expertise, is fully familiar with the fuel supply situation in every major port and has a clear understanding of each supplier’s reputation. Indeed, WFS will have a close knowledge not just of the supplier but of every player in the supply chain.” WFS said its technical team would be tracking all the developments, filtering out the noise and getting the real news to its customers.

WFS said that prudent shipping companies and bunker suppliers had already been honing their strategies and making their preparations years in advance. It said: “For many, this has been a case of not just planning, but also doing. With the introduction of the ECAs, bunker suppliers have already begun to establish their sources of low sulphur fuel supply.”

Preparing for 2020 will be a costly business, WFS warns, and for companies that get their strategy wrong, it could be a very costly business indeed. WFS added that it would be helping its clients “make the right investments that will bring an environmental and operational return, and avoid the mistakes that could put their business in jeopardy”.

“Communication will be vital in the runup to 2020,” WFS asserted. “The world’s refining sector, the fuel storage operators, the port and flag state authorities and, of course, the bunkering community will have to work together constantly to make sure that the tanks are full with the right kind of fuel on 1 January 2020. And on every day thereafter.”

A further indication of how WFS intends to prepare itself for a challenging future came in January when it announced that it would be the exclusive supplier of marine fuel at the Sunoco Logistics Nederland Terminal in Texas, starting in March 2017. WFS is supply both RMG 380 and 0.10% sulphur MGO ex-pipe.

So how will this change the market for traders? WFS predicted: “For shipowners lifting bunkers in ports all over the world and buying on the spot market from suppliers whom they have perhaps known only fleetingly, there could be considerable uncertainty. In many cases, bunker buyers will be looking to their trading partners to bridge this information gap – and this will become an increasingly important part of the trader’s role in the post-2020 bunker market.”

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Consolidation or ‘rationalisation’ would be the inevitable result of the scenario sketched out by WFS. While it could perhaps be argued that WFS’s case is self-serving, it is far from alone in its views. For example, bunker industry veteran, and now senior partner at 20|20 Marine Energy, Adrian Tolson said recently: “Rationalisation is the by-word in today’s bunkering industry and.....major bunker traders will have to get used to this.

Traders are seeing their share of the market shrink and physical suppliers are seeing their supply volumes erode as they rationalise away from the low margin, larger supply locations.” In another comment he warned that continued consolidation within the container shipping markets was setting the tone for a tough 2017 in the bunker markets. He warned: “The merger of the liner services of the big three Japanese container lines – NYK, Mitsui-OSK and K-Line – is yet another step in the continued consolidation of the container industry.” He noted that, after mergers, acquisition and bankruptcy the 20 largest container carriers in 2015 had been reduced to just 14 by late 2016. Further mergers, possibly failures, in the container shipping must be very likely. Large scale consolidation within the bunker industry’s customers can only be reflected by similar rationalisation on the supply side, traders included. One strategy to survive in the long term is to expand into physical supplies and building a worldwide presence. Bunker trading company, Dan-Bunkering recently announced that it was expanding its presence in Colombia by entering into a partnership with Petrocosta for physical supplies in Cartagena. Dan-Bunkering said: “This partnership is complementary with the current one with Australian Bunkers in Buenaventura, and will develop and strengthen Dan-Bunkering’s physical presence in Latin America. Dan-Bunkering will handle all sales and will provide risk management while Petrocosta will handle the sourcing, blending, supply, and storage of the products.” Pedro Gomez, General Manager of Dan-Bunkering (Chile) SpA, comments: “I am very pleased to announce this increase of our physical presence in Latin America as we feel we have a lot to offer our clients in this particular region.

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Bomin Group, already a significant global physical supplier, as well as a trader, of marine fuels has strengthened its physical operations in the AmsterdamRotterdam-Antwerp (ARA) region by time-chartering two new bunker barges. Bomin said that the move supported its business strategy of investing in key regions, and developing its global infrastructure and resources to drive long-term growth and sustainability. The company launched its physical operation in Antwerp in 2015. The addition of two new barges in the ARA region followed the 2016 launch of physical operations in Singapore and Mauritius. Jan Christensen, Global Head of Bunker Operations, Bomin Group, said: “We are continuing to make significant progress in ensuring our global infrastructure and operations are well developed to meet the fuel supply challenges of our customers.

Both barges have Coriolis Mass Flow Meters installed to guarantee customers receive the quantity of products that they order, and to drive further operational efficiencies. By strengthening our physical presence in ARA we can enhance our operational flexibility and increase the choice of products we offer to customers in the region.” Attracting and keeping the right key people is also crucial to the success of bunker trading operation and several firms have been strengthening their teams in recent months Cockett Group has announced that Eric van Oers, Maria Sortsi and Mehul Vora have joined its commercial team. They will be based in the Group’s Netherlands (Rotterdam), Greece (Athens) and UAE (Dubai) branches respectively. Cockett Group’s Chief Executive Officer Cem Saral, commented, “We have appointed valuable new team members who are integrating well and ensure we commence 2017 with a further optimized commercial team.”

Headquartered in Dubai, UAE, the group operates from 16 offices globally an annual trading volume in excess of 7 million metric tonnes per annum. Meanwhile global broker and trader KPI Bridge Oil has promoted Mark Perrins, a senior trader in the London office, to the position of Trading Manager. The position is a new role created by KPI Bridge Oil London’s managing director James Enston. KPI said it was “specifically designed to focus on driving business development in the current challenging market conditions”. Glander International Bunkering has also been making new appointments and staff changes. Among them, bunker and lubricant trader Victor Spangenberg has been moved from Dubai to Glander’s new Oslo office. The company has expanded its operations to the Norwegian capital “in order to gain access to new market segments in the shipping industry”.

WFS is to be exclusive bunker supplier at the Sunoco Logistics Nederland Terminal, Texas. ©WFS

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Our Latin American offices were established less than two years ago and I am very proud that we are capable of offering physical supply in no less than three South American areas by now.”


fuel QUANTITY

Singapore sets an example The world’s largest bunker port has brought in mandatory use of mass flow meters

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ingapore, the world’s biggest bunkering port by sales volume, has become the first to insist on the use of mass flow meter (MFM) systems for bunker deliveries. Back in July 2014 the Maritime and Port Authority of Singapore (MPA) said that use of MFMs would become mandatory for deliveries of marine fuel oil (MFO) from the beginning on 2017. So there was no surprise when that was exactly what happened on 1 January this year. The move is the culmination of a lot of work by MPA and others. IBIA has been heavily involved in preparing for the mandatory use of MFMs and has been running courses in Singapore which have proved to be very popular. In late December MPA issued a Circular reminding market participants of the new regulations. It says: “All MPA licensed bunker suppliers, bunker craft operators, bunker surveying companies and bunker surveyors are to adhere strictly to the terms and conditions of their bunker licences and requirements of TR48:2015 [which details the requirement for MFM systems] for MFO bunker delivery by MFM in the Port of Singapore. MPA will take firm action against any licensee who has acted in contravention of their licences, including suspending or revoking their bunker licences, as appropriate.”

“The automated MFM system is meant to dispense with conventional sounding of the MFO in bunker tanks as the quantity of oil transferred from the bunker vessel to the receiving vessel will be automatically measured by the MFM device as the oil passes through the device. At the completion of bunkering the device will issue a printed Bunker Metering Ticket (BMT) showing the delivered quantity as witnessed by the bunker vessel’s cargo officer, vessel’s chief engineer and the bunker surveyor (licensed by the MPA), if one has been appointed. The Bunker Delivery Note (BDN) prepared by the cargo officer will be based on quantities stated in the BMT and it will be presented to the chief engineer to sign at the same time as when the BMT will be signed by both the cargo officer and chief engineer and both documents attached together and copies thereof distributed.” It explained: “The MFM system is mainly meant to minimise, if not eliminate, human inaccuracies and errors in measuring the quantity of bunkers by the traditional manual sounding of tanks. Hence in line with this aim, parties to the bunker delivery operations have to, prior to the commencement of bunkering, perform various checks of the MFM system, for example, like inspecting the

seals on the device which should be fully intact and untampered/unbroken and the sampling equipment provided by the bunker vessel should also be checked to ensure that they are in good working order. Sampling will be by a device attached to the end flange of the delivery hose for the connection to the bunker manifold flange of the vessel.” Skuld advised: “As the mandatory MFM system for bunkering in Singapore is a completely new practice, there is no official historical record of issues, problems, disputes and steps taken, whether technically or legally to resolve disputes. A few bunker suppliers have apparently practised the use of the MFM system in more recent times and there have been (unofficial) reports of satisfactory results for a vessel’s bunker final receipt quantity (as measured by the vessel) but there are also reports (unofficial) of shortage in deliveries and ensuing disputes. As the MFM procedures will be totally new to most ship operators and their shipboard personnel, it would be advisable that owners or charterers who are having vessels bunkered in Singapore port on/after 1 January 2017 to always arrange through their local shipping agents a licensed bunker surveyor to attend.”

In fact it would appear all of Singapore’s 130 plus bunker barges intended to continue to deliver MFO after the new requirement took effect met the deadline. Another 135 or so will just be used for delivering marine gas oil (MGO). P&I club Skuld struck a slightly cautious tone on the move late last year when it said in statement:

Mass Flow Metering Systems are now mandatory for MFO deliveries in Singapore. ©ExxonMobil

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it

Digital threats and promises

The shipping industry is becoming increasingly aware of cyber threats but digital is the only way forward

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new international campaign has been launched to raise awareness of the increasing maritime cyber threats to international shipping, ports and offshore operations, with the bunkering sector clearly as vulnerable as any other part of the shipping industry. The ‘Be Cyber Aware At Sea’ campaign was launched by cyber security trainer JWL International in January and is supported by several industry organisations, including marine insurer North P&I Club. Through the campaign’s website at www. becyberawareatsea.com it encourages the sharing of research data, best-practice cyber guidelines and educational articles to help all stakeholders understand the challenges and threats the digital era brings to shipping and offshore operations. This includes a series of campaign posters, which North has also made available for free download from its website and is distributing hard copies to members with its Signals loss prevention newsletter. North’s deputy loss prevention director, Colin Gillespie, says: “Shipowners and crews are faced with many operational demands and dealing effectively with cyber risks is yet another challenge. Raising awareness of the risks is the first step in reducing the threat to shipping companies’ commercial networks.”

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Meanwhile major ship operator Thome says it takes cyber security very seriously and continuously monitors its protocols and procedures to keep up to date with the ever changing cyber threats and technological advances in cyber security. “A significant portion of cyber threats arrive in the form of email so we have invested in a layered approach in our network security systems to weed out these increasing sophisticated attacks,” says Claes Eek Thorstensen, president of the Thome Group. In a separate initiative Steamship Mutual P&I Club has released its latest DVD ‘Cyber Security: Smart, Safe Shipping’ highlighting the implications of a potential cyber security breach for a shipping company. As Steamship points out, all businesses rely heavily upon computer systems to sustain their operations. These systems improve operational efficiency and capability, but they can be vulnerable to the risk of being compromised by cyber-attack. Such attacks can take various forms, and if that risk of attack materialises, operational effectiveness can be seriously compromised. Consequently, companies are becoming increasingly aware of cyber risk, and are taking a variety of measures to harden system security, raise awareness of cyber- risk amongst their staff and strengthen procedures to mitigate that risk.

Cyber risk however is not confined to shore-based operations. Commercial ships are becoming progressively more dependent upon computers to operate and control various shipboard systems. These systems may be integrated, and the ability for ships to connect to the internet is growing as the communication demand grows. As with computers ashore, shipboard systems are equally vulnerable to cyber-attack. If a vessel’s systems are compromised, the effect of that could be considerably more serious than would be the case ashore. The ship, her crew and cargo could be placed at risk, and could in addition create risk to other parties. As with cyber risk ashore, the human interface commonly represents the principal weakness in the cyber security framework. Because of the potential threats that shipping operations pose to the environment, other vessels and port infrastructure, Steamship emphasises that it is vital that shipowners and operators are aware of cyber risk. Individual seafarers need to become more aware so that they become particularly vigilant in adhering to company procedures designed to maintain the integrity of computer systems, and in monitoring the reliability of the data output from shipboard computer systems.

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• •

To coincide with issuing the DVD, Steamship has confirmed its support for the ‘Be Cyber Aware At Sea’ campaign. While it is vital to be aware of the risks, the advantages of digitalisation continue to become more apparent all the time. A recent example is a Winterthur Gas & Diesel (WinGD) and Propulsion Analytics cooperative project on 2-stroke digitisation. This will allow the acquisition and evaluation of real-time propulsion operating data that is expected to play a crucial role in both engine operation and on-board support.

troubleshoot abnormalities by providing the crew and the shipping company with more detailed information on which key components are affected and what are the relevant steps to fix the malfunction. integrate planning and online spare parts purchasing. train its crew and shipping company by providing virtual and interactive tuition. communicate engine data ashore to the ship owner and, if wished, to other interested parties such as service providers. store data in a secured environment enabling fleet comparisons when required.

All these capabilities will be implemented into a user-friendly on-board system comprising of the most competitive and state of the art hardware, software and data analytics techniques.

Representing a major step towards digitisation in the shipping sector, the objective of the system to be developed is to provide ship owners and operators with digital technologies that will enhance both operational efficiency and crew decision-making processes related to the main engine.

Based on needs identified by WinGD in consultation with engine end-users, Propulsion Analytics will develop software solutions for processing and evaluating data gathered from on-engine sensors. The data will be processed in a digital controlling, monitoring and diagnostic systems.

The system will acquire and analyse data on the performance and condition of the engine and its sub-components in real-time and so provide live troubleshooting and diagnostic advice to the crew. In addition, as required, the system will be capable of connecting to shore-based stakeholders. In this way, this system completes and enhances ship digitization by providing a 2-stroke engine performance optimizer and diagnostic system, according to WinGD’s VP Operations Andrew Stump.

The complete system is also intended to provide a valuable source of knowledge on real-time, round-the-clock engine operation. That can be used to improve engine performance based on load profiles acquired over complete voyages in a full range of ambient conditions (air temperature and pressure, winds, tides and currents).

The proposed system will enable the ship operator to: •

“In present market conditions, where shipping companies are striving to further optimise their operations and reduce costs, this technology will provide real time support to improve the performance

and operational efficiency of their main engine and machinery, while simultaneously strengthening WinGD’s technology leadership in this new digital era,” notes VP Operations Andrew Stump. “With real-time data collection and exchange across a shipping company’s vessels, WinGD’s new engine diagnostic system will be the first advanced product on a 2-stroke engine that will not only optimise and monitor performance but will also track the condition of key engine components. It will be able to predict future malfunctions and provide troubleshooting support to shipping companies in order to prevent failures and/or fix technical problems faster and more economically.” Looking at the wider implications of digitisation at a time when global communications networks are expanding rapidly, Stump notes that the project represents a great step on WinGD’s digital transformation journey. “Industry 4.0 and the Internet of Things represent tremendous opportunities for traditional businesses when incorporating and integrating digital services into product portfolios to achieve a leading position in the next innovation wave,” he says. “Our collaboration with Propulsion Analytics utilises their deep digital knowledge to enable a more traditional products company such as ours to enlarge its offering by taking advantage of the digital technologies.” This is clearly an impressive project, and there are plenty of others underway that are also taking us towards a digital future. But that list of the system’s potential uses is also food for thought. The idea of a nasty virus, some sort of ‘ransom-ware’ for example, infiltrating such a system and playing havoc with all the vessel’s main operating and communication systems is terrifying. That is why so much effort is now going into making the whole shipping industry ‘cyber aware’.

optimise engine performance in all its aspects (fuel consumption, power, emissions). intelligently diagnose the engine status, via performance information, sub-systems and components current behaviour, enabling prediction and diagnosis of component malfunction and extension of maintenance intervals (condition-based maintenance).

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The objective of Steamship’s latest DVD-ROM is to assist in the process of increasing awareness of cyber risks at sea in an effort to help control an ever growing threat. As with previous productions, the DVD-ROM has been produced by Callisto Productions Limited of Aberdeen with the financial support #of The Ship Safety Trust.


LUBES

Lubes for the future

Commercial and operational pressures are driving the development of new lubricants

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ubricants not only make a significant part of overall ship operating expenses, around 25% on some estimates, but they also safeguard the engine. Getting it wrong can be very expensive. Paying too much for lubricants when most shipowners are under intense financial pressure is also not a sensible option and there is a strong incentive to look for cost saving options. Moreover, lubricants costs are expected to increase. In October last year, international accountant and shipping consultant Moore Stephens expected the increase for the whole of 2016 to be 0.8%, and for lubricant costs to rise by another 1.4% this year. Getting the balance right may not be easy as the lubricants market has become a complex one as manufacturers strive to meet the varying operational challenges to lubrication systems, such as slow steaming and switching between heavy fuel oil and distillates. For example, Shell Marine has developed its Shell Alexia 140 which is intended to protect “the most modern ultra-efficient diesel engines against cold corrosion while still optimising cylinder oil feed rates, across the entire range of vessel operating conditions”. The lubricant manufacturer said last year it had been working very closely with the major original equipment manufacturers (OEMs) and several ship owners “who fully support this development”. It added: “Following its formulation and exhaustive laboratory testing in 2015, the new Shell Alexia 140 has successfully completed over six months of shipboard trials with a Shell Marine customer.” “We are responding rapidly to the changing needs of the industry, helping our customers to cope with their full range of operating conditions,” said Jan Toschka, General Manager of Shell Marine.

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“This latest development underpins our commitment to the industry and its future. We have our own in house testing capability and extensive field experience, coupled with the monitoring, analysis and advisory services to respond to the market with proven and comprehensive solutions.” The new lubricant, Shell Alexia 140, is an ultra-high base number (BN) oil with a BN of 140. It is targeted for use on its own or as part of an onboard lubricant blending or mixing system. MAN Diesel and Turbo (MDT) told last year’s CIMAC Congress in Helsinki that it had been trialling Automated Cylinder Oil Mixing (ACOM), the two-stroke marine engine major’s pilot scheme to establish best practice in matching lubricant BN to fuel sulphur content whilst minimising lubricant feed rates. A Shell Marine customer was selected for the first batch of trials. “Major OEMs now recommend cylinder drain oil analysis as a way for ship owners to optimise feed rates as it allows them to strike the right balance between corrosion protection and minimised oil consumption,” added Toschka. “Shell Marine is focusing on solutions that are operationally straightforward. These include cylinder oil condition monitoring and drain oil analysis, the software and advisory services that help to interpret and implement OEM requirements, and assisting ship operators to develop crew skills as well as knowledge. In all areas, our objective is to work with the customer to deliver the most reliable solution.” Meanwhile last September, Total Lubmarine launched Talusia Optima, a new cylinder lube oil compatible with high sulphur heavy fuel oils and ultra-low sulphur distillate fuels. According to Total Lubmarine the “new lube is a breakthrough development that will simplify the management of vessels trading

globally in and out of Emission Control Areas, and offers the potential to significantly reduce lube consumption and help extend engine life”. It is suitable for use with fuels ranging in sulphur content of between 0% and 3.5% and has received a no objection letter from major OEM Winterthur Gas & Diesel (WinGD) for the use of the product across its two-stroke engine ranges. Launching the product at SMM in Hamburg last year, Total Lubmarine’s Technical Director Jean-Philippe Roman said: “It will make life on-board easier for ships’ crews and greatly minimise the risks encountered during fuel changeovers. Tests conducted during sea trials have all shown that Talusia Optima’s resistance to adhesive wear is better than that of conventional BN 100 cylinder lube oils, and piston coating wear rate is improved by 30%. Indeed, the final inspection on-board one mega boxship that had used Talusia Optima for 4300 hours whilst deployed on Asia-Europe liner routes, found that its engine had perfect piston and liner cleanliness.” Research towards a new generation of lubricants is underway. In September last year, ExxonMobil carried out the first firing of a new crosshead slow speed test engine to drive forward its research and development of next generation cylinder and system oils for the marine industry. The bespoke test engine is intended to provide ExxonMobil with a platform for meeting the needs of increasingly complex engine designs driven by changing regulation affecting the industry. Engines are now operating under more varied and demanding conditions, placing new challenges on the engine lubrication. The test engine offers an advanced method for lubricant development, which will help speed up the timeline for bringing new products to market.

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LUBES

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he formulation of next-generation cylinder oils that are aligned to customers’ needs will help them to address tomorrow’s challenges and play a key part in improving engine protection and performance. “Our test engine is an exciting step forward for the industry,” said Steve Walker, global marine equipment builder manager at ExxonMobil. “ExxonMobil’s commitment to developing nextgeneration lubricants will support the marine industry’s pursuit of increased performance, protection and efficiency.” The test engine offers unique capabilities due to its rapidly configurable bore-stroke ratio and its ability to simulate a wide range of new engine design parameters. ExxonMobil’s research and engineering teams can also apply scientifically derived operating conditions to replicate demanding field environments to which marine lubricants are exposed. A range of different fuels can be used in the test engine when formulating specific high and low base number (BN) cylinder oils.

Under traditional running conditions, no regular consumption of a 2-stroke engine’s system oil takes place. Its additives are depleted and viscosity increases over time. As BOB generates a consumption of the in-use system oil, the crank case oil is replenished with fresh oil with fresh anti-wear and detergent additives. As the refreshment becomes a reoccurring event, system oil viscosity is returned to its original state, reducing friction in the engine and thereby, MFT says, providing proven fuel savings up to 1.5%. According to MFT, the SEA-Mate Blending-on-Board Value Calculator allows customers to evaluate the different potential savings with their engine and running conditions in mind, and a vessel-specific savings potential report is generated. The report highlights potential cylinder oil savings, as well as energy and consumption savings related to having a continuous refreshment of the system oil.

Calculations are on actual system and cylinder oil consumption and cost for both main engine and auxiliary engines. It also includes an estimate for expected reduction of maintenance cost – reduced cost for change of cylinder piston rings and liners, reduced cost for purifier maintenance and more. The resulting report is emailed to your inbox for further evaluation and support when building a business case. Sune Lilbaek, Head of Sales at Maersk Fluid Technology, explains: “By using the value calculator it is easy to see the potential cost savings achievable with the introduction of a BOB system. With over 200 installations to date, we have proven it is possible to achieve lubrication at, or close to, the lowest allowed consumption of lubricant as specified by the engine manufacturer. This results in proven reductions of up to 40% in 2-stroke engine cylinder oil consumption, as well as significant fuel and maintenance savings”.

While much of the effort of lubricant manufacturers has gone into producing a universal solution, capable of meeting all operating conditions, Maersk Fluid Technology (MFT) has recently upgraded its product aimed at assisting shipowners to blend oil to match operating conditions. The SEA-Mate Blending-onBoard Value Calculator now includes a mobile optimised version that will assist in calculating savings, based on a variety of real life scenarios. The SEA-Mate® Blending-on-Board (BOB) system enables the crew on board the vessel to blend an engine-specific fit-for-purpose cylinder lubricant with the optimal neutralisation and detergent properties. The in-use 2-stroke engine system oil is blended with a high-BN cylinder oil. The resulting fit-for-purpose cylinder lubricant composition matches actual engine operating conditions and fuel sulphur levels, making it possible to reduce cylinder oil consumption and mitigate issues like cold corrosion and excessive cylinder wear.

World Bunkering spring 2017

ExxonMobil’s new test engine will be used to develop next generation lubricants

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Looking ahead As John Rickards reports, the main bunkering ports in the Western Mediterranean are all aiming to position themselves to take advantage of a changing market

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he bunker sector in the Western Mediterranean has very much one eye on the future, something its respective coastal states will no doubt hope gives them an edge as the global sulphur cap approaches in three years’ time. Spain’s port of Barcelona, one of the first to jump on board with the EU’s program to establish LNG fuel supply infrastructure, made further strides into the nascent LNG bunker market this autumn. In September, oil major Cepsa announced that the company would be working with Flota Suardiaz to design and build what it claims will be Europe’s first multi-product barge. The vessel, supplying LNG alongside all conventional grades of marine fuel, is slated to begin operations in Barcelona in 2018. Cepsa’s bunker director Alberto MartínezLacaci said: “Our customers will benefit from the great flexibility that the barge will give, supplying all types of fuel from standard fuels to the most innovative, taking us a step ahead of the change in European regulations.” He went on: “Cepsa is a bunker leader in Spain and supplies marine fuels in other important international ports such as Fujairah and Panama, so it had to be involved in this project. We are convinced that it will open a new chapter in the European bunkering market, whose future will be closely tied to the use of lower emitting fuels such as liquefied natural gas.”

World Bunkering spring 2017

The company has also been promoting its use of supply metering, claiming that the installation of mass flow meters on two of its barges in the Bay of Gibraltar made it the first supplier in the Strait to install the Coriolis MFM technology. Cepsa’s initial installation was on two barges, and while the company was unable to confirm to World Bunkering the extent of the installations at present, the plan was to cover the rest of its fleet there, and then in other ports like Barcelona, Las Palmas, Tenerife and Huelva. Cepsa’s bunker manager Alberto Martínez-Lacaci said: “Having a technology that allows an absolutely precise fuel supply is a priority for our company. We have opted for a pioneering system in order to offer our clients a supply based on transparency and the trust that they place on our products and operations.” Absolute accuracy of supply is likely to become of even more interest to customers refuelling in European waters as the EU’s MRV regulation to control CO2 emissions comes into effect from next year. The port of Barcelona itself, meanwhile, has been adding further to its moves to draw LNG traffic. In November, it announced that as part of its Air Quality Improvement Plan it was going to ask the Spanish government to allow it to introduce a discount on port fees for cleaner ships of up to 40%, rather than the 5% green discount currently allowable under Spain’s Ports Law.

Citing the example set by rival ports in northern Europe, Port of Barcelona general manager José Alberto Carbonell said: “The discount applied to port fees is a very important tool, since it is a fundamental instrument for bringing about change in the vessels.” Port president Sixte Cambra added: “Over the last two decades our Port has led the way on environmental issues and we are firmly committed to continuing in this leading role. We are aware that our responsibility as a public company is to lead the change towards a more sustainable model.” In the meantime, the neighbouring ports of Algeciras and Gibraltar have each seen developments in their local markets. Last year, Aegean Marine Petroleum halted operations in Algeciras for “commercial reasons”, focusing instead on Gibraltar and Tangier Med across the Strait, leaving Peninsula Petroleum as the only supplier working both sides of the bay. In Gibraltar, there’s finally been some movement on the contentious plan to offer LNG bunkering. The Gibraltar government’s desire to break into the LNG market has faced questions from opposition party members and Gibraltarian pressure groups over safety fears.

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Western Mediterranean

Cepsa has been pushing to keep its Spanish services ahead of the curve © Cepsa


CEO and Captain of the Port Commodore Bob Sanguinetti said: “It reinforces our aspiration to remain the Mediterranean’s premier bunker port and centre of maritime excellence, and is indicative of the strong partnership between the port and Shell as they seek to develop Gibraltar as a key hub in Shell’s LNG network.” The government has since been forced to clarify that if LNG bunkering does go ahead, it’s planned for offshore supply only, and only after Control of Major Accident Hazards investigations are completed. The Shell agreement followed a deal the year before to supply LNG for power generation in the territory, a deal that at the time the government denied would lead to bunkering, describing such a move as “quite some way away”. Also looking ahead to the future is French recycled bunker firm Ecoslops. The company has been developing its slops recycling and refining process for a number of years, and opened its first plant in Sinès in Portugal in 2015 with the aim of producing 30,000 tonnes of IFO,

XFO and light bitumen in 2017. Last autumn, the company announced a partnership with Total to look into building a second oil residue microrefinery in La Mède, near Marseille. Ecoslops CEO Vincent Favier said: “The success of our first unit in Portugal established Ecoslops as a technology leader. Many other conversations are in progress in order to equip large ports. The large scale and significant traffic of the Port of Marseille convinced us that it was the right location for the settlement of our second unit. The viability of our project, as well as the findings of our shared research with Total, backed the common interest in setting up our micro-refinery in the La Mède location.” The company has also signed its first medium-term financing deal, worth €1m over four years, with a Portuguese bank in the summer, and is still aiming to sign deals for further refineries in the West African port of Abidjan and the Black Sea port of Constanta by the end of this year. Another mooted alternative fuel has been causing controversy in Italy. The US Navy spent the summer making plenty of noise about taking its first delivery of Italian-made biofuel. The USS Mason, along with Italy’s Andrea Doria,

took on a blend of palm oil biofuel and regular MDO produced by Italy’s Eni. Speaking at the event, then-US Navy Secretary Ray Mabus described it as “the new normal” and touted the aim to have 50% of its fleet powered by “alternative energy” (including nuclear) by 2050, an aim echoed - and indeed exceeded; for his own navy by Italy’s Admiral Giuseppe De Giorgi. However, with the blend being 94.5% regular MDO, critics have been quick to point out that the fuel itself can barely be described as “alternative” or a serious solution to naval fossil fuel dependency, and given palm oil production has a considerably higher CO2 footprint than crude extraction, its environmental benefits are dubious. The Italian Navy signed a joint research and use agreement for marine biofuels with the US Navy in 2014. Previous blends tested were a10% blend based on beef fat and a punishingly expensive 50% blend produced from algae. Whatever comes of the Italian biofuel project, the signal is clear: Environmental regulations will encourage new fuel solutions across the region.

Gibraltar could see LNG bunkering in the near future if current plans go ahead © Tim Ove

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However, last summer the government inked a deal with Shell to carry out a market development study by the end of this year, dealing with the regulatory requirements, environmental impact, and technical standards.


Central America

Bunker ports at the western terminus of the Canal might see their dominance under threat ©F Ermert

Not much difference, yet The widening of the Panama will have an impact on the regional bunker scene but, as John Rickards reports, it will take time

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ll eyes have been on Panama for the past year, with the Canal widening finally completed last summer and the industry waiting to measure the effects of “neo-panamax” traffic on regional bunker demand. Early traffic reports were more concerned about whether the new locks were safe for the full size of vessels they were intended to allow, with tight space allowances for tugs raising fears of collisions and transit delays, including a joint study from the International Transport Workers’ Federation and the Fundação Homem de Mar that outlined fears of greater manoeuvrability issues in windy conditions. However, after a couple of early issues the Panama Canal Authority was quick to squash talk of safety concerns and such reports died away quickly, leaving the industry with purely economic considerations to ponder over. Bunkering in Panama itself seems likely to remain largely unaffected overall unless total cargo volumes increase dramatically. Local players suggest that while larger ships, with larger fuel needs, are now transiting the Canal, such vessels have a greater range and are less likely to stop for bunkers locally rather than refuelling at their next port of call.

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Writing in July, not long after the widened Canal opened, Monjasa, which supplies fuel across the region, suggested that eastward shifts in box traffic bound for the US could benefit suppliers in Cristobal, at the eastern end of the Canal, and serve to even out some of the inequality in volumes supplied between Balboa and its eastern counterpart. The same shift could then go on to benefit suppliers across the Caribbean. One company in prime position to take advantage of such an increase in eastern demand is storage firm Vopak. Last summer the Dutch company announced it had obtained regulatory approval for a new 360,000 cbm terminal development in Bahia las Minas, as well as signing a long-term management contract with Chevron to manage the oil major’s own 509,000 cbm terminal in the same port. Vopak said: “The location in Bahia las Minas, Panama, is strategically situated at the crossroads of international trade and transportation routes for refined products. It is very well located to serve the international refined products markets in the Panama region, and to serve the expected increasing bunkering needs resulting from the expansion of the Panama Canal.”

The new development will take two years to build and will include new tank farms and infrastructure, as well as jetties for ships of up to 80,000 dwt. At the other end of the Canal, there’s been a victory for LNG carrier operators, with the Panama Canal Authority reversing its earlier policy of refusing them bunker calls; prior to last year, LNG carriers weren’t allowed to transit the Canal at all due to the perceived risks to the locks. The ACP is now allowing the vessels to refuel in the explosives area of the Canal’s Pacific anchorage. It’s clearly going to be some time before Panama authorises LNG bunkering itself, but that hasn’t stopped the ACP from trying to push the Canal’s emission reduction credentials in recent months. Last summer, it launched its ‘Green Connection Award’ to recognise operators whose greenhouse gas emissions meet or exceed IMO or other global standards. Under the scheme, the ACP evaluates operators based on ships’ Energy Efficiency Design Index and Environmental Ship Index scores, the amount of nitrous oxides they emit, whether or not vessels are powered by LNG, and, perhaps contentiously, the amount of CO2 emissions they reduce by using of the Canal compared to alternative routes.

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Central America

At MEPC 70 in late October the ACP was again promoting the Canal’s environmental benefits, and what it terms its ‘Green Route Strategy’. “Since opening in 1914, the Panama Canal’s strategic geographic location has enabled vessels to shorten the distance and duration of their voyages compared to alternate routes, thus reducing costs and emissions,” the authority said. “In total, the waterway is estimated to have saved more than 650 million tonnes of CO2 emissions over the course of its 102 year history.” It went on to add that the newly-widened Canal would allow savings of an estimated 160 million tonnes of CO2 in its first 10 years. With GHG emissions an increasingly important marker of any operator’s green credentials, the Canal’s claims are bold. However, the ACP hasn’t said how it’s arrived at its estimates. For instance, it doesn’t specify whether the estimate for the tonnes saved is based on a given ship sailing from Colon to Balboa via the Canal instead of via Cape Horn, a journey that it would in reality be highly unlikely to make if bound, say, for China. If that were the basis for the figures, it could, alongside the vagueness of the standards needing to be met to qualify for the award, weaken the ACP’s claims. World Bunkering reached out to the ACP for clarification but received no response before going to press. One thing the Canal doesn’t have to worry about at present, though, is its putative Nicaraguan rival. It had been suggested by developer HKND that work might begin in August on a wharf to bring in machinery needed by the project alongside a fuel terminal, but there doesn’t seem to have been any movement on the ground yet at all. Once again, World Bunkering contacted HKND in search of an update, and once again heard nothing. While the company spent the summer sifting through the results of archaeological surveys on the route, anything more concrete has yet to materialise.

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CARIBBEAN Jamaica is very keen to shape itself as a bunker hub on the back of increased Canal traffic ©Jeremy Bradford

Ambitious plans Caribbean bunker suppliers find themselves in a position to take advantage of changes in regional shipping patterns, as John Rickards reports

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ith the Panama Canal newly widened and suppliers hoping for a surge in eastbound traffic as a result, and its position just outside the North American ECA, the Caribbean could become an important region for bunker supply if all goes to plan. One company looking to benefit from increased traffic from the Canal is Jamaica’s West Indies Petroleum Ltd. As reported in the last issue of World Bunkering, the company bought out the mothballed ethanol storage facility in Port Esquivel to convert for bunker storage. The new tanks, WIP’s first shoreside facility, greatly expand WIP’s storage capacity at a time when Jamaica hopes to capture a major slice of the Caribbean bunker market. World Bunkering caught up with WIP director Tarik Felix.

WB: WIP’s buyout this summer of the Port Esquivel storage facility gives the company its first onshore storage and greatly increases your available capacity. How important was it for you as a company to expand like this? What impact do you see the new acquisition having on your services in the future? TF: We believe that Jamaica is well on its way to realising its potential as the logistics hub of the Caribbean and the acquisition of Port Esquivel shines a spotlight on these emerging opportunities for Jamaica, the Caribbean and Central America. World Bunkering spring 2017

WB: It’s been suggested in local media that you might move into selling fuel storage space at the terminal to other companies. Is that a possible further line of business for WIP? TF: We don’t turn our noses up at any business opportunity! We are not currently in any transactions to selling fuel storage, however we are always open to conversations relating to same.

WB: The tanks were built to handle ethanol and so needed conversion to HFO and marine distillates. Has that been completed yet? TF: Work is still underway but we are on schedule for the next couple of weeks for the world-class storage facility to be in full operation.

WB: WIP is a comparatively new player in the physical bunker supply sector. How has the past year of operations been? Have the wider oil market’s difficulties had any effect? TF: Our first barge was commissioned in June, 2012 and the second in October, 2015. We are a relatively new player in the market and with 40% market share, we continually strive to improve on this through our professionalism by fuelling our customers vessels with integrity and excellence, with full dedication to providing a consistent supply of quality

fuel, delivered with outstanding service at a competitive price. We are growing by making the correct acquisitions to improve storage and distribution capabilities.

WB: What do you hope to see for WIP in the year ahead? TF: We are moving with Government of Jamaica’s vision in the logistics hub by playing a major role in providing fuel solutions to other companies also in the logistics hub. We foresee the Jamaica logistics hub to be a globally successful operation in this region and we look forward for the future. WIP’s move may have come at an ideal time, with the government putting its money firmly behind port expansion with the aim of attracting more traffic and bigger vessels, and a specific target of drawing a higher share of the bunker market. At the start of the autumn, Jan De Nul subsidiary Sodraco joined a consortium which has been handed a two-year deal to expand the port of Kingston, with dredging and renovation work that will enable to the port to accept the larger ships now able to use the Panama Canal. Parent company Jan De Nul said in a statement: “In 25 months the access channel and the port basin will be deepened, and the berths on the existing quay walls will be reinforced and renovated.

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ence, the port will be able to provide access to larger container vessels, which will find their way to the region more easily thanks to the expansion of the lock complex in the Panama Canal.” And in Montego Bay, a major port development plan was resumed by the Jamaican government in November having been placed on hold while USbased Fortress Energy built a dedicated gas terminal in the port. The plan is intended to draw greater cruise traffic and box vessels by upgrading facilities, construction of new terminal buildings, expanded box and bulk cargo storage, and the addition of LNG bunkering provisions including a dedicated fuel berth. Reports suggest that the Port Authority of Jamaica is spending US$100m on the redevelopment.

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The PAJ was quoted in the Jamaica Gleaner as saying that the port’s close proximity to Sangster International Airport was making it a popular switch for cruise ship home-porting, which relies on having a nearby airport to bring passengers to and from their vessel, and with LNG being supplied to the newly-converted Bogue power plant, the port is an obvious candidate for LNG bunkering provision. It’s not just Jamaica angling for more cruise custom in recent months. Last autumn, Antigua’s West Indies Oil Company signed a bunker supply deal with Royal Caribbean to refuel RCL’s ships whenever they docked in Antigua. WIOC CEO Gregory Georges put the deal in context in the Antigua Observer, saying:

“One of the larger cruise ships like the Queen Mary would take approximately 4,300 metric tonnes; that’s about 30,000 barrels… that’s almost like the monthly consumption of Antigua.” And while it’s not aimed at any specific market, US-based Freepoint Commodities, which bought the bankrupt Hovensa refinery in St Croix, US Virgin Islands, with ArcLight Capital in 2015 to turn it into an oil storage hub, announced in November that it was ready to begin ex-pipe bunker supply at the port. The Caribbean is clearly attractive to cruise ships, with ports and bunker suppliers in the region keen to attract their business. With expanded facilities, some of the region’s ports and suppliers are also gearing up to attract more general cargo vessels.

World Bunkering spring 2017


uae Fujairah’s bunker suppliers will be waiting to see if OPEC’s cut deal will lift prices ©Michael Gaylard

Shifting sands Much depends on whether OPEC’s production cut will really push the price of oil back to $50 a barrel, as John Rickards reports

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arly 2016 saw considerable upheavals in the Middle East’s local bunker market, with Iran formally re-entering the fray and the much-touted benefits of the new Suez Canal failing to have much actual impact in reality. The latter half of the year and early 2017 have seen no such game-changers, and instead all eyes have been on one factor that makes a huge difference to the region in terms of both its traffic profile and its bunker trading: crude production levels and their effects on oil and products prices. In late 2016, OPEC managed to agree a production cut in a bid to halt the glut of crude on the market and its consequent price woes, hoping to push prices back up above $50 per barrel or higher. Cheap crude, driven by the Saudi-led ‘market share first’ policy has meant cheaper bunkers with smaller margins, full storage facilities, but also relatively steady tanker traffic plying the Middle East Gulf. At the same time, continuing global economic uncertainty has seen container traffic through the region stagnate. Bunker players in the region are notoriously reluctant to reveal trading volumes in such a fiercely competitive environment. None of the major Dubai-based suppliers approached by World Bunkering to confirm the actual state of the market were willing to put their heads over the parapet, but the picture has clearly been a challenging one.

World Bunkering spring 2017

Even a moderate rise in oil prices would allow for improved margins for suppliers, and while tanker traffic would inevitably decline a little on production cuts, a stronger local economy would only see other traffic rise at the UAE’s key ports. For the production cut to work, of course, non-OPEC members have to go along with the move to raise oil prices rather than rushing in to fill the perceived gap. The UAE’s energy minister Suhail Al Mazrouei told Bloomberg in December that a global production cut of around 1.8 million barrels per day would stabilise oil prices at a sustainable level, which would leave non-OPEC producers like Russia needing to cut their own output by a total of 600,000 barrels; OPEC’s agreement is for a cut of 1.2 million bpd. While Al Mazrouei described the spectre of US shale as “always a worry”, he remained confident that prices at the very least wouldn’t fall further, below the $40 mark, even if it proved impossible to persuade Russia to lower its production. His optimism in either event may be tested, as uncertainty over whether non-OPEC states would follow suit - and even whether OPEC itself will stick to the cuts - is a running theme amongst most industry analysts. With both Russia and US shale producers likely to be tempted by the chance of increased market share in a market stabilised however marginally by OPEC’s move, the odds on both of them holding back seem long.

Such upstream uncertainties aren’t entirely holding back the UAE’s local bunker players from either expanding their operations or broadening their existing offerings, however. Last autumn, Monaco-based bunker group Rudder announced the opening of a new subsidiary in Dubai headed by industry veteran Robert Thompson as part of an expansion effort that the company hopes will make it a leading bunker player. In a statement, Rudder described the Dubai venture as “a logical next step in a planned and well resourced expansion programme”. Rudder has operations in Singapore and Argentina, and representatives in Miami. “Several experienced traders have been recruited and will add further impetus to the growth plans,” the company said. “Rudder management are intending to add more high calibre personnel to its dynamic team as the expansion gathers pace.” Gulf Petrochem, meanwhile, announced a deal at the end of the summer with the UAE’s NGC Energy and its parent company National Gas Company SAOG of Oman to distribute India’s IPOL brand of lubricants. The five-year deal has a target trading volume of 100 mt per month in each territory by the end of August.

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Gulf Petrochem group director Prerit Goel said: “This partnership seems like a natural step for all concerned and will only serve to enhance the availability of quality products on the market in the UAE and Oman. We believe there is a huge market in the region for IPOL, which is specifically tailored for industries, and in partnering with National Gas Company SAOG and NGC Energy, we have secured business with trusted firms who share our ambition and drive.” Nalin Chandna, general manager of National Gas Company SAOG, added: “Since we signed [the initial proposal] in September 2015, we have been working together to put all the necessary infrastructure in place, in order to meet our expected demand levels when operations begin. In this time we have seen similarities in the way we both work and believe our partnership can only be fruitful for all concerned. IPOL is a quality product which suits the market in the UAE and Oman and we are delighted to be able to distribute the product there.”

“Chemoil is committed to meeting industry best practice and worked closely with Lloyd’s Register, in partnership with the National Metrology Centre of Singapore, A*STAR and bunker consultancy Metcore International, to certify the barge systems to Singapore MPA’s TR48 standard,” the company said in a statement. LR’s Douglas Raitt said: “The implementation of this advanced and accredited metering technology sets a new standard for the marine fuels measurement process accessed by Chemoil and its clients in Middle East,

providing tangible financial and resource savings.” The company is hoping that the extra degree of transparency provided by the use of MFM systems, as well as turnaround time savings and the avoidance of disputes over delivery quantities will see tangible commercial benefits as well as harmonisation between markets. Whatever permutations the immediate future of the oil and fuel markets have for the UAE, local suppliers are clearly keeping an eye on the future.

The link up isn’t the only piece of business leaning on close relations between the UAE and India, with December’s terminal management deal between the port of Fujairah and India’s JSW Infrastructure. The company will handle Fujairah’s mechanised bulk cargo terminals (Fujairah’s box terminals remain under DP World’s umbrella), and represents JSW’s first move out of India’s own port network. “This foray will strengthen business and trade ties between India and the GCC region, especially UAE. The inking of this pact opens new opportunities for us in global arena putting us in the league of the world’s best port operating companies,” said JSW’s joint managing director and CEO Captain BVJK Sharma in a statement. It’s not just purely commercial ties that are shaping the UAE’s bunker sector, either. The close links between the fuel markets of the Emirates and Singapore and the latter’s adoption of mass flow metering as standard is having a knock-on effect in the Gulf, perhaps more so than in other regions where MFM installation is happening at a slower pace. In November, Chemoil announced the installation of MFMs certified to Singapore’s TR48 standard on all three of its barges operating in Fujairah and Khor Fakkan, with a total combined capacity of 19,500 mt of IFO and 2,200 mt of MGO.

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The new Suez Canal has yet to bring the bumper traffic the industry was hoping for ©Michael Gaylard

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FUJCON

Driving Transformation Key bunker conference to address challenges of new sulphur regulations

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ore than 40 speakers are to address the 10th International Fujairah Bunkering & Fuel Oil Forum (FUJCON), to be held from 27-29 March 2017 in Fujairah, UAE. Through presentations and round table discussions, leading oil and bunker producers, traders, oil majors, terminal operators, refiners, banks, shipowners & classification societies will be sharing their views, analysis and insights on the global bunker and fuel oil market developments, and trends and challenges of the industry. Under the broad theme “Driving Transformation Across the Bunkering Supply Chain” key decision makers, thought leaders and marine experts will be discussing the impact of the new sulphur regulations coming in force in 2020, and how to prepare. Also to be covered at this major biennial event are trading and risk management strategies, the challenges of marine fuel quality, legal perspectives of the bunker industry, new environmental regulations and the growth of LNG bunkering. Speakers include Fereidun Fesharaki, Chairman, FGE; Christopher Bake, Executive Committee and Head of Origination, Vitol Group, UK; Moradi Azad, VP for International Affairs, Petroleum Products Marketing & Operations, National Iranian Oil Company, Iran; Mousa Morad, General Manager, Port of Fujairah, UAE; Harihar Prasad, MD, World Bunkering spring 2017

McQuilling Partners Inc & Board Member, Institute of Chartered Shipbrokers Middle East, UAE; Yusr Sultan, MD-Terminals, Emirates National Oil Company (ENOC), UAE; Mr Cem Saral, Group CEO, Cockett Marine Oil DMCC, UAE, Peter Hall, Chief Executive, International Bunker Industry Association, UK; and Mr Grant Hunter, Chief Officer, Legal & Contractual Affairs, BIMCO, Denmark. FUJCON is held under the auspices of the Government of Fujairah and the Port of Fujairah, with the patronage of His Highness Sheikh Hamad Bin Mohammed Al Sharqi, Ruler of Fujairah & Member of the UAE Supreme Council. A government of Fujairah statement noted: “The highly successful Fujairah Bunkering Week will once again underscore Fujairah’s global credentials as one of the top three bunkering destinations and crude oil storage hubs. A strategic location with strategic facilities, Fujairah offers state-of-the-art facilities with new oil tanker terminals/ berth pipelines, a new LNG terminal, the Dolphin gas pipeline and offshore SPMs, enhancing its efficiency and logistical support of the global crude oil and oil products industry. The hosting of FUJCON affirms the commitment of the Government of Fujairah & the Port of Fujairah to provide a fitting platform for an established event on the world bunkering community’s annual calendar.”

FUJCON 2017 takes place during the Fujairah Bunkering Week, gathering some 400 participants from 40 countries, from the bunkering, oil storage and allied industries. The week offers five industry events, 12 social functions, two site visits and over 30 hours of networking opportunities. Four pre-conference workshops from 25-27 March will offer coverage and in-depth analysis on Ship Safety & Pollution, Bunker Operations, Bunker Fuel Supply & Economics and Bunker Fuel Blending, covering the impact of new maritime regulations, while providing great learning opportunities with plenty of case studies, guest presentations and a specially arranged laboratory visit as part of the curriculum. An offshore site visit arranged for the afternoon of 29 March 2017 and hosted by the Port of Fujairah, will provide attendees an opportunity to visit the Port of Fujairah, its offshore Anchorage & installations, including the Fujairah Oil Tank Terminals and the recently commissioned VLCC berth.

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Scrubber

Gearing up for 2020 Scrubber manufacturers anticipate a spike in demand as the 0.50% sulphur limit looms up

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clear winner regarding the type of scrubber to be installed has yet to emerge. Manufacturers are still hedging their bets and backing most of the various possible configurations – in-line, multi-stream, open loop, closed-loop, and hybrid. However there is more unanimity on the way the market is moving – their way. “By 2025, up to 20% of the global fleet could have this technology installed,” said DuPont Clean Technologies Marine Business Development Manager, Europe, Marco Dierico recently. “Ship owners and operators that want to minimize costly changes and continue to burn heavy fuel oil (HFO) will require a scrubber to clean the fuel. It is estimated that in the run up to 2020, between 500 to 2,000 additional ships will retrofit with scrubbers.” Dierico noted that, to meet the 2020 global sulphur cap, ship owners and operators may consider switching to marine diesel oil (MDO)/marine gas oil (MGO), liquefied natural gas (LNG) or methanol. However, he expected, as the price differential between HFO and MDO/ MGO increases, many ship owners would install exhaust gas cleaning systems to quickly and effectively meet regulations. He continued: “A key question for refiners concerns the future of HFO. If refineries do not have to upgrade their heavy fuel, or install increased hydrotreating capacity, they will prefer not to. It is expected that HFO with a higher sulphur content will become significantly less expensive compared to low sulphur fuel oil over time, which will make installation of a scrubber economically sound and future-proof for [shipowners]. A DuPont statement asserted: “Scrubber technology continues to advance, and additional improvements in emission monitoring, washwater treatment, and reduced system footprint are on the horizon.

World Bunkering spring 2017

With many options, shippers will be able to make smart choices that both protect their bottom line as well as human health.” Meanwhile orders for scrubbers continue to flow in. The Grimaldi Group has placed orders for seven hybrid Alfa Laval PureSOx systems with U-design scrubbers. With new PureSOx orders booked in October, comprising seven car carriers to be built at China’s Yangfan Shipyard, the Grimaldi Group will bring its total number of PureSOx systems to 19. The second system ordered is also the 100th PureSOx system to be sold with a U-design scrubber. “Alfa Laval offers both the U-design and an inline-design, but the U-design remains the ‘classic’ version of PureSOx that is still the best choice for the majority of vessels,” said René Disk, Manager Marketing & Sales, Exhaust Gas Cleaning at Alfa Laval. “The fact that Alfa Laval has sold over 100 U-design scrubbers since launching five years ago shows the strength of the design and of PureSOx as a whole.” Each of the PureSOx systems on the Grimaldi Group vessels will be connected to a MAN two-stroke engine. Because the vessels will sail between Italy and the United States, where Vessel General Permit (VGP) legislation applies, they will be equipped with hybrid systems that offer both open-loop and closed-loop modes.

“Our experience with Alfa Laval PureSOx on Grimaldi Group vessels has been overwhelmingly positive,” says Dario Bocchetti, Environmental Manager of the Grimaldi Group. “We know that these new vessels will meet SOx emission and discharge limits, and the use of hybrid systems will allow them to do it in the most cost-effective manner possible.” In another project, Kawasaki Kisen Kaisha, Ltd (“K” Line), Mitsubishi Heavy Industries, Ltd. (MHI) and Mitsubishi Kakoki Kaisha, Ltd. (MKK) have been undertaking test operations aboard an actual ship of a newly-developed Hybrid SOx Scrubber System. The test results have verified that the system’s effectiveness in curbing emissions of air pollutants complies with international regulations, and it has been officially approved by the ship’s flag state, Panama. The Hybrid SOx Scrubber System test unit has been installed on “K” Line’s car carrier Drive Green Highway. The core components of the Hybrid SOx Scrubber System can be contained in an ISO shipping container. “K” Line says this modular packaging means that the major system components can be installed on an open deck, for example, thereby not only allowing the space within the ship to be used efficiently but also helping to reduce installation time. AS the container package is relatively easy to remove and transfer to a different vessel, installation on older ships becomes feasible with this system.

Closed-loop scrubbing is necessary in order to meet the very strict VGP washwater discharge requirements. PureSOx uses water cleaning technology based on centrifugal separation when vessels are sailing in closed-loop mode. The choice of hybrid systems, however, will give the Grimaldi Group vessels full operational flexibility, allowing them to sail in open-loop mode whenever allowed.

Alfa Laval’s PureSOx U scrubber

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LNG

IGF Code now mandatory New training requirements are also now in force for crews on gas-fuelled ships

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new mandatory code for ships using gases or other low-flashpoint fuels entered into force on 1 January this year, along with new training requirements for seafarers working on those ships. Amendments to the International Convention for the Safety of Life at Sea (SOLAS) require new ships using gases or other low-flashpoint fuels to comply with the requirements of the International Code of Safety for Ships using Gases or other Low-flashpoint Fuels (IGF Code), which contains mandatory provisions for the arrangement, installation, control and monitoring of machinery, equipment and systems using low-flashpoint fuels, focusing initially on LNG. An IMO statement asserts that gas and other low-flashpoint fuels are cleaner for the atmosphere as they emit very low levels of air pollutants, such as sulphur oxides and particulates. But, IMO notes, these fuels pose their own safety challenges, which need to be properly managed. The IGF Code aims to minimize the risk to ships, their crews and the environment, given the nature of the fuels involved. Amendments to the International Convention for the Safety of Life at Sea (SOLAS) require new ships using gases or other low-flashpoint fuels to comply with the requirements of the IGF Code, which contains mandatory provisions for the arrangement, installation, control and monitoring of machinery, equipment and systems using low-flashpoint fuels, focusing initially on liquefied natural gas (LNG). The amendments to SOLAS chapter II-1 (Construction – Structure, subdivision and stability, machinery and electrical installations), include amendments to Part F Alternative design and arrangements, to provide a methodology for alternative design and arrangements for machinery, electrical installations and low-flashpoint fuel storage and distribution systems;

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and a new Part G Ships using lowflashpoint fuels, to add new regulations to require ships constructed after the entry into force on 1 January 2017 to comply with the requirements of the IGF Code. Related amendments to chapter II-2 and Appendix (Certificates) also enter into force. The IGF Code addresses all areas that need special consideration for the use of low-flashpoint fuels, taking a goal-based approach, with goals and functional requirements specified for each section forming the basis for the design, construction and operation of ships using this type of fuel. Amendments to the International Convention on Standards of Training, Certification and Watchkeeping for Seafarers (STCW), and STCW Code, which also came into force at the beginning of the year, include new mandatory minimum requirements for the training and qualifications of masters, officers, ratings and other personnel on ships subject to the IGF Code. Meanwhile Canadian ferry operator BC Ferries has taken delivery of its first LNGfuelled vessel, the 8,728 gt Salish Orca,

the first of three new Salish Class vessels built for the British Columbia-based company. The vessel was built in Gdansk, Poland, and reached British Columbian waters after a 50-day 10,440 nautical mile voyage. Mike Corrigan, BC Ferries’ President and CEO said: “The Salish Class vessels will provide us cost savings and efficiencies with standardized vessels and greater interoperability as well as enhance safety well into the future. They are very well built ships, which will serve our customers for many years to come.” Using natural gas as the primary fuel source, the new vessels are expected to reduce greenhouse gas emissions by approximately 15 to 25%, reduce sulphur oxides (SOx) by over 85%, reduce nitrogen oxides (NOx) by over 50%, and nearly eliminate particulate matter. The 107-metre ships will carry 145 vehicles and up to 600 passengers and crew. They feature two car decks and have a service speed of 15.5 knots. Each is powered by three Wartsila 8L20DF engines.

Photo courtesy Remontowa Shipbuilding S.A.

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LEGAL

Crucial evidence Correct sampling procedures are key when quality disputes arise

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he Shipowners’ P&I Club, which provides liability insurance for smaller and specialist vessels, has recently experienced an increase in the number of bunker quality dispute claims arising from the delivery of allegedly off-specification or contaminated bunkers.

Prior to taking delivery, the ship’s crew should ensure that these details correspond with the stemmed specification. He says: “Unfortunately, we have been notified of claims where the crew failed to perform these checks and when the discrepancy was realised, it was too late to rectify the mistake.”

In an article on the club’s website, its claims handler and correspondent manager Mudit Singh explains that these claims have ranged from variation in the parameters of the bunker supplied to presence of contaminants, such as ash and microbes. This can result in expensive claims not only because of the bunkers themselves but also related costs such as machinery damage, time lost, and tank cleaning costs.

The article stresses that representative samples are the most crucial evidence to preserve, as it will be relied upon if a dispute later arises regarding the quality of bunkers supplied. Samples of bunkers already in the receiving ship’s tanks should also be collected prior to commencement of bunkering operations, and mixing of new and old bunkers should be avoided as much as possible.

Singh notes that, depending on the charter arrangements, either the owner or the charterer will be responsible for ordering and arranging bunkers to be supplied to the vessel. Bunker receivers may find supplier’s terms onerous. In particular, the liability exclusion clauses and short time periods (commonly 15 days for quantity and 30 days for quality) within which a claim has to be presented in a jurisdiction of the supplier’s choice. He advises: “BIMCO has issued a more balanced Standard Bunker Contract which [Shipowners Club] members may find helpful and we encourage them to use it as a starting point when negotiating a supply contract.” It is also important that the correct grade of bunkers, based on the engine type and applicable regulations, is ordered and specified in sale and purchase agreement. To avoid any confusion, it is best to specify the grade of bunkers by making a reference to their ISO 8217 grade. Blending of bunkers in the receiving ship’s tanks or in the hoses should be avoided to ensure bunkers delivered are homogeneous. At the time of delivery, Singh stresses, the ship’s crew should be presented with a bunker delivery receipt detailing the specifications of bunkers being supplied.

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It is usual practice that the ship’s crew are presented with samples collected on board the bunker barge. In most cases, this is the agreed sampling procedure under the supply contract and these samples are considered as representative. If this is indeed the case, the ship’s crew should attend the sampling on the barge to ensure that correct sampling procedures are followed and that sufficient sample quantity is retained for future analysis (MARPOL provides guidelines in Resolution MEPC 182(59) which can be followed). Sampling equipment should be clean and tamper proof and samples collected must be sealed and retained. The ship’s crew should ensure that the samples retained for analysis are in addition to the mandatory MARPOL sample.

or other local regulations governing the specification of bunkers to be consumed by the vessel. ISM and MARPOL checklists and records must also be preserved to demonstrate that proper procedures were followed. If the bunkers are found to be offspecification or contaminated they should not be used and a surveyor should immediately be appointed to collect the samples – preferably jointly with the bunker supplier’s appointed surveyor. Depending on the degree to which the bunkers are found to be off-specification or contaminated, an analysis (preferably jointly and at a mutually agreed laboratory) of these samples will need to be carried out. Bunker quality experts may also need to be appointed to advise on mitigation of damage to the ship and to suggest further appropriate analysis which bolsters the claim/defence. Singh advises owners to also explore indemnity provisions in other relevant contracts, such as charterparties, when faced with bunker quality issues. “Timely action and notification is the key to avoid expensive claims and successful indemnity action against third parties involved in the bunker quality dispute,” he concludes.

Upon completion of bunkering, the supplier should present a Bunker Delivery Note (complying with MARPOL Annex VI Reg. 18.5) to the ship’s crew and a copy should be retained by the ship’s staff. Newly supplied bunkers should only be used once their samples have been analysed and they are found to be on-specification and free of contaminants. Not doing so exposes the ship’s machinery to damage from off-spec and/ or contaminated bunkers and the owners of the vessel to a breach of MARPOL

A quality claim could depend on this sample

World Bunkering spring 2017


Russian update

A new bunker terminal has opened at Kholmsk

Duty free bunkers dispute resolved The Board of the Eurasian Economic Commission (EEC) has finally resolved a long-running dispute over how much duty-free bunker fuel can be supplied to a ship as ‘supplies’, Olga Bogacheva reports

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ussian bunker suppliers have been waiting for this ruling for a long time because, over the past few years, Russian customs authorities have used their own discretion to restrict the amount of fuel delivered to ships in an attempt to combat illegal fuel exports. Customs officers made their own calculations for duty free fuel based on limiting the amount to the “quantity not exceeding the volume necessary for proceeding to the nearest port outside the customs territory of the Customs Union”. Where strictly applied this rule has greatly inhibited bunker sales. This practice contravened both the Customs Code of the Russian Federation, and the current Customs Code of the Customs Union. The two Codes only limited duty free fuel to the available capacity within the ship’s designated bunker tanks. The EEC has now established a specific procedure for calculating the volume of duty-free fuel based on average actual consumption of the ship’s engines. In practice, this appears to be as follows: if the last bunkering delivery to the ship within the territory of the Eurasian Union occurred not less than 30 days previously, the maximum permitted amount of duty-free fuel is obtained by multiplying the value of its average daily consumption by the number of days elapsed from the date of the last bunkering.

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However, if the date of the last bunkering within the territory of the Eurasian Union has been more than 30 days previously, or the vessel has arrived in the territory of the Eurasian Union for the first time, it will be allowed to get duty-free bunker fuel not exceeding the capacity of its installed tanks. The Board of the Eurasian Economic Commission clearly defined in this decision a list of information that must be presented when declaring the bunker fuel supplies. The Russian Association of Marine and River Bunker Suppliers fully participated in discussions on the new document, being a part of the specially organised working group. Market players have welcomed the Commission’s decision with great relief because sometimes absurd situations had arisen. Working with the old system took a huge amount of time and resources and, as a consequence, brought losses to bunker companies. One expert commented: “The new procedures do not make life easier, but at least now no one imposes restrictions on the export of bunker fuel.”

Draft oil spill response bill delayed Following representations by the Russian Association of Marine and River Bunker Suppliers (RAMRBS) the Russian State Duma has postponed consideration of a draft bill that would introduce an administrative approval procedure for oil spill response (OSR) plans. The Council of the State Duma postponed consideration of the draft bill “On Amendments to the Federal law on sea ports in the Russian Federation”. Clause 3 of this document was intended to replace the notification procedure for approval of OSR plans with an administrative procedure which, RAMRBS argued, could greatly hamper the work of bunkering companies and increase their costs. RAMRBS provided evidence to the relevant committees of the State Duma that the adoption of such fundamental changes without prior public discussion would have been unacceptable. Procedures for discussing the changes, although compulsory under current legislation, had not been followed. The Association claimed that the proposed revision of the bill sets new unjustified administrative barriers and creates conditions for corruption, which will ultimately squeeze independent bunkering companies out of the market.

World Bunkering spring 2017


A new fuel bunkering complex has started operations in the north-western port of Kholmsk, West Sakhalin. The new terminal, within the port, which is seen as being much more convenient and safer than fuelling out at sea as happened previously, has been built by Sakhalin Shelf Service. The fuel bunkering complex covers over 23,000 sq m in total and includes a berth specially equipped to accept tankers and perform bunkering operations. The complex has storage tanks with a total capacity of 14,000 cu m for marine fuels. Sakhalin Shelf Service was founded in 1997. Its main task was to provide integrated coastal services for oil and gas developments on the Sakhalin shelf. The company operates the Sakhalin West Sea Port (SWSP) in Kholmsk.

World Bunkering spring 2017

Kholmsk, an ice-free seaport of national importance, is located on the south-west coast of Sakhalin Island, on the shore of the Tatar Strait, Sea of Japan. SWSP is the only facility providing full service to oil and gas projects on Sakhalin Island and in the Far East. It is the deepest port in Sakhalin and is able to accept ships of up to 10,000 dwt with draughts of up to 9 metres.

Rosneft increases water transport of oil products The Samara Group of Rosneft refineries, comprising the Novokuibyshevsk, Samara and Syzran refineries increased waterborne transportation of oil products by more than 31% in 2016, compared 2015, to nearly 2.8 million tonnes. The oil was carried by tankers chartered from Rosnefteflot and Rosneft, as well as the company’s own fleet, Prime Shipping.

Despite the 2016 navigation season being reduced by a week due to bad weather conditions, all water shipment plans were implemented. Oil products from Samara refinery are loaded on river tankers at five oil berths on Volga. Refurbishment of one of the berths was completed in October, 2016. Annually, Rosneft transports more than 4 million tonnes of light and dark oil products, including motor fuel, from its refineries by river fleet. The fleet delivering petroleum products consists of more than 140 river tankers and barges owned by various shipowners.

Gazpromneft Marine Bunker fuel for Royal Caribbean Cruises Gazpromneft Marine Bunker carried out 49 bunker stems to Royal Caribbean Cruises vessels at St. Petersburg in 2016. About 32,000 tonnes of marine fuel were delivered during the summer season from early May to mid-October including about 19,000 tonnes of heavy fuel oil and over 13,000 tonnes of distillate.

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Russian update

Sakhalin Shelf Service launches bunker complex at Kholmsk


TOC Bunkering orders tugs from Damen Shipyards TOC Bunkering, Novorossiysk, a member of the DeloPorts Group, has ordered four tugs from Damen Shipyards. According to a DeloPorts statement, three vessels will be delivered at the port of Novorossiysk in the third quarter of this year, with the fourth vessel to follow in 2018. As well as providing bunkering services,

World Bunkering spring 2017

TOC has become the sole provider of support services at the DeloPorts terminals. “It is envisaged that it will serve all vessels calling at DeloPorts terminals,” TOC General Director Oleg Nechayev said. DeloPorts LLC is a Russian holding company, owning the stevedoring and bunkering assets of Delo Group, one of the largest private transport and logistics holdings in Russia. The companies of the Group provide a full range of services in transshipment and bunkering in Novorossiysk port, rail and multimodal container transportation, forwarding, customs clearance of export-import cargoes in Russia and CIS, deliveries of petroleum and petroleum products. TOC bunkering company is a member of the Russian Association of Marine and River Suppliers.

Russian update

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Gazpromneft Marine Bunker statement notes that cooperation between the two companies at St. Petersburg started in 2008. About 300,000 tonnes of fuel have been delivered to Royal Caribbean Cruises since then. In 2014, Royal Caribbean named Gazpromneft Marine Bunker its “supplier of the year”.

Petersburg Oil Terminal wins Rosneft contract Petersburg Oil terminal (POT) has signed a major contract with Rosneft oil company which is expected to see POT handling nearly 5 million tonnes of petroleum products annually, mainly residual fuel, from Ryazan, Yaroslavl, Mozyr and other Rosneft refineries by the end of 2019. In the 1990’s, after the collapse of the Soviet Union, the majority of facilities for transshipment of oil and petroleum products were in the Baltic States. More recently POT became the largest oil export facility. Then Ust-Luga oil terminal was built in the new Ust-Luga port, and since 2010 the volume oil products transshipped through POT declined sharply. The new contract with Rosneft may change the situation.

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INNOVATION

Achieving fuel savings A new report highlights technologies that could cut fuel consumption by up to 30%

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he UK-based Energy Technologies Institute (ETI) has published a new report which highlights what it says are affordable ways of cutting fuel consumption and says it will fund the development of three promising technologies. ETI, a public-private partnership comprising BP, Caterpillar, EDF, Rolls-Royce and Shell and the UK Government, plans to focus on Flettner rotors, waste heat recovery and high efficiency propulsion systems. The ETI report, HDV Marine Insights, analyses the UK merchant fleet, the potential opportunities for ship owners and operators and identifies the most promising technologies that could reduce fuel consumption economically. It asserts that a 30% fleet fuel consumption reduction can be achieved by using a combination of innovative technologies with a payback of around two years. An ETI statement says: “An earlier project in the ETI’s Heavy Duty Vehicle Marine programme undertaken with Rolls-Royce and UCL produced a validated, full-scale shipping model that focused on vessels involved in the UK fleet activity. This model is central to understanding ship trading, technology and the potential for emissions reductions and improvements in fuel consumption. However, because introducing new technology is challenging, costly and risky, it needs to be demonstrated to give investors and the diverse range of stakeholders in the shipping industry confidence. The ETI is pursuing a series of at sea demonstration of new technologies over the next three years.”

Unlike the power and heat sectors and other forms of transport there does not seem to be a credible alternative to fossil fuels to power vessels, so in the medium to long term, the best potential to achieve substantial CO2 reductions is by reducing fuel consumption. Our work to date has shown that using innovative technologies could reduce fuel consumption by up to 30% with an economic payback period of around two years but the technology needs to be demonstrated to give confidence to stakeholders and overcome market barriers. This is why we are working towards demonstrating advancements in Flettner rotors, high efficiency propulsion systems and waste heat recovery systems and further details on these individual projects will be announced shortly.” The report can be found at http://www.eti.co.uk

Increasing propeller efficiency Marine technology giant Wärtsilä says fitting its EnergoProFin propeller cap can lead to fuel savings of up to 5%. The EnergoProFin is now available for both controllable pitch propellers (CPP) as well as fixed pitch propellers (FPP), yielding the same results in both propeller options. In a statement Wärtsilä says: “Offering the solution for technologically more challenging CPPs was previously considered impossible in the industry, but is now made possible due to development work by the Wärtsilä hydrodynamics team.”

The Wärtsilä EnergoProFin is described as a specially designed propeller cap with hydrofoil section fins on the downstream side of the propeller. It is an innovative energy saving device that can significantly reduce a vessel’s fuel consumption, and hence its emission levels. Such technical innovations play a major role for ship operators who are tackling rising operating costs, as it offers an opportunity to enhance the efficiency of existing assets. By improving their energy efficiency, ship operators can increase their profitability in an environmentally sound way. Propeller caps with fins have existed for three decades, but their application has so far been primarily on FPPs. The view of the industry has been that applying an energy saving device such as Wärtsilä EnergoProFin to the technologically more challenging CPP would not be possible. Wärtsilä took on the development task and succeeded in creating a product that offers vessels equipped with a CPP an opportunity to reduce their energy consumption. Wärtsilä’s development work was a spin-off of an EU-funded collaborative project between Wärtsilä and nine other companies.

Stuart Bradley, ETI Strategy Manager and the report’s author says: “Shipping emits significant amounts of CO2 which, without significant intervention, will rise as a proportion of our national emissions as we become less carbon dependent in other industry sectors. Wärtsilä’s EnergoProFin-propeller-cap offers fuel savings of up to 5%. ©Wärtsilä

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World Bunkering spring 2017


Five cruiseship newbuildings are to be fitted with Azipod units and software to maximise energy efficiency

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BB is to supply the complete power, propulsion and automation package for a series of new cruise vessels being built by German shipyard group MV Werften for Genting Hong Kong brands Crystal Cruises and Star Cruises. Three Crystal Cruises luxury Endeavor class ‘mega-yachts’ will be built to Polar Class 6 and enable cruising in the Arctic. The vessels will follow the route of migrating whales along the coast of the Americas and Europe to Antarctica during winter. The two Star Cruises Global class vessels will be among the largest in the market at 204,000 gross tonnage and have been designed for the Asian cruise market. All five vessels will all feature a complete ABB propulsion system, electric power plant, automation and marine software system. The three Crystal ships will be powered by two Azipod D units each to enable the ships to navigate polar conditions whilst the two new Star Cruises Global class ships will each be installed with three Azipod XO thrusters. All the vessels will also feature ABB´s flagship automation with Intelligent Maneuvering Interface and OCTOPUS marine software for optimised energy management.

LNG bunkering guide US-based classification society American Bureau of Shipping (ABS) has published its ABS Guide for LNG Bunkering which provides standards for the design, construction and survey of LNG bunkering systems that are on board a vessel. “This industry-leading guide incorporates our expertise in the safety aspects of LNG storage and handling as well as LNG as fuel,” says ABS Chairman, President and CEO Christopher J Wiernicki. “As a technology leader, ABS is always looking ahead, anticipating the needs of industry and finding ways to advance safety in new and emerging areas like LNG bunkering vessels.” As LNG as fuel becomes more widely adopted in the marine industry, the infrastructure will continue to expand, ABS notes. The classification society says that LNG bunkering vessels are a “prime example of that supply chain expansion and will provide a viable refuelling option around the world”. The guide sets out standards for LNG bunkering systems fitted to vessels intended for ship-to-ship LNG transfer. It also addresses bunkering station safety, lifting and hose handling equipment, control, monitoring and emergency shutdown safety systems and emergency release systems.

“This guide comes just as ship owners and operators are looking for the best refuelling option for their unique fleets and as the LNG supply chain is considering the right LNG bunkering solutions to meet those fleet needs,” says ABS Chief Technology Officer Howard Fireman. “ABS worked closely with industry to develop guidance that addresses the latest technologies in LNG bunkering systems and supports development of these systems in a safe manner.” Recognising the changing landscape and increased industry focus on gas, ABS launched its Global Gas Solutions team in 2013 to support industry in developing gas-related projects. A pioneer in classification for the safe transport and handling of gas, ABS classed the world’s first LPG carrier conversion, the Methane Pioneer, in 1959, as well as the first newbuild LNG carrier, Methane Princess, in 1964, and has extensive experience with the full scope of gasrelated assets, including many of the most advanced carriers in service. ABS says it is the industry leader in classification of liquefied gas carriers and that it maintains the largest global orderbook for the classification of LNG-fuelled vessels.

“The cooperation with ABB will further strengthen and support our vision to build the world´s most modern and efficient cruise vessels. Together with MV WERFTEN and ABB we will incorporate the latest technology into our luxury cruise ships,” commented Tan Sri Lim Kok Thay, Executive Chairman of the Genting Group. ABB says that about two thirds of modern large cruise ships, icebreakers and high ice-class cargo vessels are fitted with Azipod propulsion. It says: “Cruise owners have been using Azipod units for two decades favouring its increased efficiency manoeuvrability and space saving properties over shaft-line systems.”

World Bunkering spring 2017

ABB will provide Azipod units for Crystal Cruises’ new mega-yachts. ©ABB

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Equipment & Services

Optimising energy management


COMPANY NEWS

AKRON Trade and Transport Quality on time, every time

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stablished in 1997, AKRON Trade and Transport is a fully-integrated bunkering company that holds itself responsible and accountable for every step of product development from refinery to our consumers. The products we deliver to our clients are tested, traceable and reliable. Thanks to our geographical location off the east coast of the Middle East and our in-depth local knowledge we have secured strong relationships with oil majors, independent oil companies and refineries to ensure consistency.

The Company’s Main Activities consist of: Bunker Supplies Local and high seas bunker supplies. Over a period of time, Akron has created and established a sizeable market share in the bunker sector, selling and physically supplying marine fuel oil of all grades to all vessel types off the East coast of the UAE as well as to the international fishing fleets in the Arabian Sea, the Indian Ocean and the Bay of Bengal. As a physical supplier, the company purchases marine fuel from reputable suppliers on the spot market or under renewable contracts from petroleum trading subsidiary of National Gulf State Oil Companies. “We continually strive to become more effective and competitive within this market, which is paramount in these uncertain times so that we can provide our customers with the best bunkering services.”

Vessel Chartering AKRON’s managed vessels are available for charter to third parties on spot/voyage, or on short/medium time-charter basis, thus maximizing fleet utilization rates.

Oil Trading In addition to its physical supply operations, the company engages in substantial “whole-sale” oil trading activities, of marine fuels to its customers in the East African countries, island states of the Indian Ocean, local (UAE) government authorities, traders and specialized refineries).

Our Team AKRON has nurtured a management team that brings exceptional experience and expertise from the shipping and oil industries, particularly in tanker management and bunkering operations in the Gulf. With a strong, dedicated support team on the ground we put our experience, expertise and knowledge at your service 24 hours a day.

Our Fleet Our Offshore Bunkering operations utilize a storage mother vessel and a dedicated fleet of delivery tankers, all of which are internationally-certified and fully equipped to meet all STS requirements.

With over 150,000 metric tons of floating storage within the Arabian Gulf alone and a fleet of 27 vessels expanding year on year we have achieved an excellent longstanding relationships with our reputed charterers and with a continuous, reliable source of quality product, our customers are always ensured of prompt and efficient delivery of bunkers.

Safety & Quality Since our inception, there has been NO quality or quantity dispute, a record we are dedicated to maintain and an opportunity for us to show our customers their true value by providing optimum bunkers at the quickest turn-around time. Akron’s quality assurance program effectively controls product movement and testing to ensure accurate and dependable fuel specifications at all times. Akron possess a Zero pollution and Spill incident with a clean safety and environmental record. Akron Trade and Transport has all it takes to become and remain your reliable partner!!!

AKRON TRADE AND TRANSPORT P.O.Box 1327, Fujairah United Arab Emirates. Tel: + 971 9 2228840 Fax: + 971 9 2228841

Ship Management The company uses Group-management vessels to transport, store and deliver marine fuel products. Fully equipped to meet all Ship-to-Ship transfer requirements, as well as specially fitted for offshore bunkering and maintain high safety standards by complying with International and UAE regulations. To achieve highest quality assurance, the company handles fuels right from the refinery to the point of delivery on board its ships, effectively controlling product movements and testing procedures to ensure accurate and reliable fuel specifications at all times.

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World Bunkering spring 2017


COMPANY NEWS West Indies Petroleum South Terminal, Port Esquivel

West Indies

West Indies Petroleum is a fast-growing bunkering and fuel storage company, building a firm foundation to become the leading business partner for vessels in the Jamaican and Caribbean region

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e value the work we do by investing the best effort for the job, providing reliable services in marine refueling and dependable fuel storage facilities. By combining an auspicious moment in time following the widening of the Panama Canal, an advantageous location in the West Indies, an intuitive business sense and a heart for entrepreneurship risk, we are turning the company vision of becoming a prominent player in the fuel industry into a reality. The number of companies that have entrusted their bunkering services to us is on the rise. We add extra value to our customers by delivering accurate, efficient and safe services. Prompt feedback to any customer query is a must. Our reputation built over the years has helped us evolve into the key point of contact for bunkering in Jamaica.

We work on expanding our operations by appropriating extra storage facilities. The newly-adopted Port Esquivel facility, which is our first land-based plant, will grow our capacity to ensure a consistent supply of competitively priced fuel to our client network. Right now, we have adapted the terminal by conforming it to storage requirements for residual fuel oil which are now fully operational, we are all set to deliver to our customers at multiple supply points across Jamaica.

Round-the-clock, we are fully prepared to deliver fast-rate products and services: • • • • •

We are proud to contribute to the Government of Jamaica’s vision of developing the logistics hub potential for vessels navigating in the region. Our dedication to the local marine fueling market ensures that we know our network. By bringing together the right people and the right customers, collectively, we are ever evolving. A strong vision needs a committed action plan.

World Bunkering spring 2017

Largest bunker capabilities in Jamaica Storage in excess of 700,000 barrels All grades of marine fuels and distillates Flexible prices with no minimal volumes Safe efficient delivery

We keep the lines of communication open to our current and prospective customers. Count on West Indies Petroleum to deliver top-level bunkering business as we are: • •

Centrally positioned between three key shipping lanes Supplying within Jamaican waters 24 hours a day

Delivering by barge at inner anchorage in Kingston harbour to all vessel types Distributing by truck to other Jamaican ports

Ours is the vision of integrity and excellence. By blending core principles of accuracy, safety and efficiency with compliance to strict regulatory standards in the area we advance the quality of our services. Our supply agreement guarantees fuel costs management within budget and standardized services you can rely on. By adhering to quantity and quality certification in long-term contracts our clients get consistent fuel quality for affordable pricing. We are aware that excellence is a work in progress and remain dedicated to constant improvement. The building of a high-quality company is unstoppable when connected with a strong business hunger. We have laid the groundwork to service the enhanced maritime potential of the widened Panama Canal and meet high fuel demands of multiple shipping companies. Along with growing in quantity, we mature in quality, and as the Jamaican region increases its importance in the process of establishing a global logistics hub, West Indies Petroleum will be wired to go in full force.

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COMPANY NEWS

Baltic Fuel Baltic Fuel Company leads the market in North West of Russia

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very year hospitable SaintPetersburg welcomes millions of tourists from over the world. From May to October, during the peak season, Baltic Fuel Company successfully bunkered more than 100 passenger cruise liners. The company used its own fleet of tankers to accomplish the task. For this period of time more than 45 thousand tons of diesel fuel and nearly 27 tons of mazut have been released to the clients. Baltic Fuel Company traditionally takes up the leading position as a bunker supplier in North-West region.

The terminal produces impressive figures of transshipment volumes reaching nearly 900,000 tons a year, of which 360,000 tons are bunker fuel and other oil products used for vessels, and 540.000 tons of export petrochemicals. The investment programme aims to further the development of the Baltic Fuel Company and includes modernization of the marine terminal which will increase its’ throughput volumes: •

The company’s activity includes a wide range of services, focusing on bunker supply in the Eastern part of the Gulf of Finland, the Neva river and Black Sea ports. Other services include export and transshipment of oil products, road and inland waterway transportation in the Russian Federation as well as international shipping routes. The company also provides towing and environmental services. Additionally, Baltic Fuel Services participates in emergency rescue teams involved in localization and liquidation of oil spills in the area of Great Port Saint-Petersburg, the waters of Gulf of Finland and in the port of Novorossiysk. The company makes a good use of its’ own marine terminal Turukhtan Islands in port Saint-Petersburg. The terminal is located on a vast, more than 18,000 acres, territory with three docks built to provide safe cargo handling.

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• • •

Minerva MarineInc., Stena, Nothern Bulk Carriers West Mediterranean, Sigma Tankers (Heidmar), Nothern Bulk Carriers and many others. Baltic Fuel Company offers quality bunkering services in compliance with the all modern international standards, norms and regulations. All diversity of fuels offered by the company including mazut and low sulphur diesel fuel comply all ISO standards.

2 mln. toms of oil products (IFO 380, IFO 180, marinegasoil, LS 0.1% ) in 2016-2020. -3-4 mln. tons of oil products in the near future irregardless of their quantity and nature. 3 berths with overall length of 450m. with seabed level border mark of minus 10m. 15000 tons - overall capacity of storage tankers 8 reservoirs with overall capacity of 42,000 tons two-way railroad overpass for simultaneous unloading of 28 railway tanks

Baltic Fuel Company gained a rightful place in the top three biggest bunker suppliers in the port of Saint-Petersburg. The company has been maintaining longterm relations with major shipowners and operators, among them Сarnival Cruise Lines, Maersk Group, Oldendorff Carriers Gmbh & Co.Kg, Delta Tankers Ltd,

World Bunkering spring 2017


COMPANY NEWS

Supply your vessel with Galp The number of ships calling the port of Lisbon for bunkers only is growing

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alp, and its subsidiary companies including Petrogal SA, is the only fully integrated energy group in Portugal. Its 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 supplies over 1 million MT of all fuels for ships, distillates, residuals and high quality lubricants. These products are exclusively produced in Galp refineries, meeting the latest ISO standards and all international environmental policies. Distillates (MGO) and residual fuels are supplied by barge (three barges with total capacity of 10.5 kT), by pipeline and RTW.

World Bunkering spring 2017

Galp 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 concerns 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. Galp is able to offer special conditions for bunkers only call in Lisbon and Sines. Calling Lisbon represents a short deviation, it is a sheltered port with protected anchorage (inside port limits) during the whole year for safe bunkering by barge. Sines is also able to offer special conditions for bunkers only call, the conditions are similar. The reduction on the calling costs and having the refinery in Sines make this port very competitive.

In promoting Lisbon, the priority has always been health and safety and the protection of the local environment in accordance with the international regulations imposed on EU ports. The result of the last few years of hard work has begun to bear fruit. When comparing with 2015, the number of ship calls for bunkers only grew 44,8% and the fuel volume supplied increased by 88,6% representing nearly 100 000 Mtons. Galp, as well as the Lisbon Port Administration, are very keen to continue to develop this activity and to make Lisbon Port a leading location for bunkers only calls. Supply your vessel at the ports of Lisbon, SetĂşbal and Sines with Galp. We look forward to receiving your call.

+351 217 240 654/952 +351 210 039 032 bunkers@galpenergia.com galp.com

In the last few years a lot of hard work has been done to make the Lisbon Port more competitive and attractive by the Lisbon Port Administration, several service companies and especially by Galp.

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COMPANY NEWS

War on waste Since 1993, EMEPCO has risen to the challenge of efficient disposal of oily water and slops

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mirates Marine Environment Protection Company (EMEPCO) was established in 1993 with the aim of providing proper and efficient methods for the disposal of slops, oily water and waste oil to the various sections of the oil industry, particularly those involved in sea transportation. With a long-term agreement with the government of Fujairah, EMEPCO is today one of the prime companies providing

slop reception facilities in the Port of Fujairah, Khorfakkan and various other ports in the United Arab Emirates (UAE), as stipulated in Marpol 73/78 Regulation 38 /Chapter 6/Annex 1. This was in response to the increasing demand for environmentally safe tank cleaning and disposal of oily water from product tankers in the anchorage of Fujairah, located on the east coast of the UAE.

EMEPCO’s strategic location in Fujairah, one of the world’s major oil tanker destinations, gives the marine industry an opportunity to deliver slops generated from the crude oil washing and tank washing of product tankers, etc, to a 24-hour reception facility. This enables the vessels to comply with the zero oily water discharge restriction in the Gulfs Area, which is listed as a Marpol special area.

ORGANIZACION TERPEL S.A. Terpel is a company that sells fuel in Colombia for automobiles, aircraft, and vessels.

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e also produce lubricants with international operations in Panama, Ecuador and Dominican Republic. We are the largest distributor of vehicular natural gas in Colombia with operations in Mexico and Peru. The Terpel´s team is committed to work hard every day to keep industry and transportation moving, offering proposals to our customers that provide more value in each service station, airport and maritime port we operate. We have a highly qualified team that makes our operations fast and safe for every customer. We are proud to have earned the trust of our customers by offering quality products as well as constant innovation at the best price for you. Terpel has different business lines such as: Service stations, complementary

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services, lubricants, industrial fuels, marine fuels, aviation fuels and vehicular natural gas. Specifically in marine fuels´ business, Terpel offers Marine Gas Oil and marine lubricants with high quality and good prices, in the principal terminals in Colombia, as well as in international terminals located in Panama. Our bunker business is located in Colombia and Panama where we delivered by barge, truck and pipeline. In Colombia Terpel has one tank of 9,238 barrels for marine diesel. In its Mamonal joint venture XOM facilities owned 40%. Terpel delivers to his clients by barge and trucks. On the other hand, Terpel Panamá (Petrolera Nacional S.A) has a contract with Chevron who is the main distributor for all the oil companies in this country and have a tank at Vacamonte with a capacity of 1,620 tons of marine diesel to supply to fishing vessels.

Contact details: Eugenia Benavides, Marine sales director T: + 57-3157218311 E: eugenia.benavides@terpel.com Alejandro Pareja, Marine sales executive T: +57-3157567319 E: alejandro.pareja@terpel.com E: bunkers@terpel.com www.terpel.com In Panama: Karibbeam Rivera, Marine sales executive T: +(507) 321 0350 M: (507) 64003084 E: karibeam.rivera@terpel.com If you have any enquiries for this areas contact us. World Bunkering spring 2017


diary

DIARY 27 February 2017

19 APRIL 2017

EUROPEAN SHIPPING WEEK 2017 BRUSSELS

UK CHAMBER OF SHIPPING AND IBIA FORUM

European Shipping Week is intended to be a platform where policy-makers from the main EU institutions will meet and engage with European shipowners and other stakeholders from the shipping sector. The focus is on shipping, in all its different aspects.

This regional forum is offered by the UK chamber of Shipping in partnership with IBIA, with the theme “ 2020: Getting down to business”. The forum will engage with all stakeholders that are affected by the upcoming 0.50% sulphur limit that will apply globally outside ECAs, including refiners, owners, charterers, bunker suppliers, and fuel specialists.

This week-long series of high level events – features a major conference and Gala Dinner – bringing together the major players in the shipping industry with the primary aim of promoting the strengths of European shipping to legislators in Brussels such as the European Commission, European Parliament and the Council of Ministers. www.petrospot.com/events

Speakers will provide an update on what’s happening with regards to regulations in the EU and at the IMO, the compliance options and experiences with them, fuel quality issues, and more. The speakers will be available for a Q&A session followed by networking over drinks and canapes.

12-15 March 2017 Panama Maritime XIII

This major biennial conference and exhibition is designed to showcase shipping and maritime services in the Americas, will provide a stunning opportunity to visit the giant locks on the newly expanded Panama Canal and to celebrate the 100th anniversary of the Panama Flag Registry. The line-up of confirmed speakers includes the Secretary General of the IMO, the head of the Panama Maritime Authority and Administrator of the Panama Canal Authority. Large delegations form the Netherlands and Germany will join 500 plus delegates and exhibitors from throughout the Americas and beyond. lbh@petrospot.com

27-29 March 2017

FUJAIRAH BUNKERING & FUEL OIL FORUM The 10th International FUJCON 2017 with international recognition and attendance from 50 countries covering diversified sectors of the bunkering industry, FUJCON has raised Fujairah’s profile as an internationally recognized service Anchorage, being amongst the world’s top three bunkering locations and as a global hub for both oil storage and oil product supply.

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25-28 APRIL

International Chemical and Oil Pollution Conference and Exhibition (ICOPCE) 2017 Singapore With the theme Keeping Pace with a New Era in Marine Environment Protection the biennial International Chemical and Oil Pollution Conference and Exhibition (ICOPCE) 2017 is organized by the Maritime and Port Authority of Singapore and will be held in conjunction with the Singapore Maritime Week (SMW) 2017. ICOPCE returns for its 10th edition as Asia’s leading platform focusing on the preparedness and response strategies for oil and chemical spills. ICOPCE is held In conjunction with Singapore Maritime Week (SMW), the leading maritime event in Singapore. Driven by the Maritime and Port Authority of Singapore (MPA). SMW gathers the international maritime community in Singapore for a week of conferences, dialogues, exhibitions and social events in celebration of all things maritime. The range of activities and events organised by MPA, the industry and research and educational institutions, as well as the cosmopolitan profile of participants, reflect the vibrancy and diversity of Singapore as a major international maritime centre. www.icopce.com

World Bunkering spring 2017


30 May-2 June 2017

IBIA (ASIA) GALA DINNER

Nor-Shipping 2017

For the third year in a row, the IBIA Asia branch will be hosting the IBIA (Asia) Gala Dinner. This prestigious event, which will be held at the Shangri-La Hotel in Singapore, will offer a unique opportunity to our members in this region to meet key people in the industry. Book your table and tickets now to avoid disappointment as numbers are strictly limited. Contact our office in Asia to book on Tel: +65 6472 0916 or email nadiah@ibia.net

This major shipping event takes place in Oslo and Lillestrøm, Norway. Nor-Shipping 2017 is taking a pro-active approach to the challenges facing the industry, adopting an overall theme of ‘Catalyst for Change’, while dedicating exhibition Hall A to Disruptive Sustainability. Problem to Profit marks another move against convention, tapping into fresh talent while building bridges between established players and future leaders. https://messe.no/en/nor-shipping/

17-18 May

European Bunker Fuel Conference Rotterdam This year’s event will aim to understand just what the 2020 global cap decision means for the industry. Can the refining industry supply enough 0.5% come 2020 and do they feel secure in making the investment? The conference will also identify the challenges ahead as the oil price fluctuates. The low oil price has certainly helped the shipping industry keep afloat over the last two years, but as the price climbs, what does this mean for the supply chain? The conference will also explore the outlook for scrubbers and alternative fuels. Will the uptake in scrubbers keep HSFO on the table? What future will alternative fuels have in the fuels mix, when will we see growth? www.platts.com/eurobunker

World Bunkering spring 2017

diary

27 APRIL 2017

11-15 September 2017 London International Shipping Week 2017

This, the organisers say, will be the ‘must attend’ event of 2017, offering over 160 industry functions and unique networking opportunities for leaders across all sectors of the international shipping industry – regulators, charterers, ship owners, ship managers, bunker suppliers, lawyers, ship brokers, bankers, insurers, insurance brokers, commodity traders and brokers, ship suppliers, port operators, shipping service providers and many more. The sell-out one-day LISW17 Conference and Gala Dinner, to be held on Thursday September 14, will attract the very highest level government and shipping industry leaders from the UK and around the world to crown what promises to be another amazing week. www.petrospot.com/events

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Next ISSUE

World bunkering

summer 2017... now open for bookings

Special Features: Oil Majors Now IMO has confirmed the 0.50% global sulphur cap will come into force in 2020 how will the oil majors respond? How do they see demand shaping up after the deadline?

Fuel Management Effective fuel management is becoming increasingly important. We take a look at what is on offer.

Scrubbers For some owners, as 2020 approaches, there will be stark choice between paying for 0.50% sulphur fuel or fitting scrubbers. For other owners it will be charterers who take the decision. Will scrubbers become the default choice, and how quickly can vessels be retrofitted with this kit?

Geographical Focus: Eastern Mediterranean These are turbulent times in the Eastern Mediterranean but how are the bunkering sectors standing up in Cyprus, Greece and Turkey?

Indian Subcontinent Our annual survey of the marine fuel industries in Bangladesh, India and Pakistan. What’s new? What are the prospects for developing the region’s bunker markets?

Mauritius This island nation has turned itself into a significant bunkering hub in the space of just a few years. How has it managed to achieve that? What does the future hold for its bunker industry?

Regular Features Russian Update News, Views, Analysis Interview, Industry News, Environment, Testing, LNG, Lubricants, Innovation, Legal News, Equipment and Services, Diary Event Previews & Reviews

www.worldbunkering.com ibia@constructivemedia.co.uk 74

World Bunkering spring 2017


World Bunkering Spring 2017  

ADAPT OR PERISH CHALLENGING TIMES AHEAD FOR TRADERS inside this issue: IBIA puts bunker industry’s case at IMO Russian Customs breakthroug...

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