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WINTER 2013

WINTER 2013

InsIde thIs Issue:

New optimism in Africa US gets ready for LNG Adding value? Russia rules row World BUNKERING

IBIA's HK success Association aims to influence the rulemakers

THE ONLY OFFICIAL MAGAZINE OF

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Editor’s letter

Variety is the spice of life

W

elcome to one of the most packed and varied issues that I can remember editing. This winter issue went to the printers shortly after the highly successful International Bunker Industry Association (IBIA) convention in Hong kong. you will find quite a lot about the convention here. IBIA chairman Simon Neo and chief executive Peter Hall highlight important issues covered – particularly on the morning of the final day, which was devoted to IBIA policy issues and, in a new development that is almost certain to be repeated next year, featured electronic voting. Towards the back of the magazine, you will find three pages devoted to the convention. These mainly let the photos taken by marine engineer and bunkers expert Nigel draffin tell the story of an exciting three days. There will be more about the substance of the various presentations, and also the implications of the voting on the Thursday morning, in the spring issue. The convention apart, I hope readers will find this issue is informative on a wide range of topics. Ara Barsamian has written an in-depth and thought-provoking article on blending. His comprehensive overview of the advantages of blending, and also his explanation of what you can find in ‘on-spec’ bunkers, should elicit responses from readers. I am always happy to publish letters and would welcome correspondence on the blending issue. This issue’s Interview is with Inatech’s Alok Sharma, who says his company works on “both sides of the manifold”. By that, he means it creates

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fuel management platforms for both shipping and bunkering companies. A recurring theme throughout this issue’s pages is what will fuel the world of the future. There are many mentions of scrubbers and liquefied natural gas (LNG), but Sharma surely puts his finger on one major driver for change. He says: “Currently, about 11% of the barrel is fuel oil. In the next 10 years, that is going to decrease to 4%.” The implication is that residual fuel will be harder to get hold of as well as more expensive. That, of course, would be a major turnaround from the present situation. Nevertheless, scrubbers of various designs are now starting to be fitted on vessels, and the numbers equipped to operate in emissions control areas (ECAs), burning high-sulphur fuel oil but still complying with emissions regulations, is increasing rapidly. These systems feature in both our Innovation and Equipment and Services pages. There is, of course, an alternative fuel, which had been waiting in the wings, but is now moving centre stage. LNG is not going to take over from fuel oil overnight and, in my humble opinion, it will not supersede residual fuel oil for at least 20 years. However, LNG is moving ahead much more quickly now than seemed likely just a year or so ago. Our deputy editor, Sandra Speares, in her North America feature, reports that the Obama administration has put its weight behind a switch to LNG, and government-funded projects are giving an extra push to a move that was already gaining momentum.

For those readers who are wondering just what an LNG bunker barge will look like, we have the answer. Or at least we feature a design concept from a team who certainly know what they are talking about – NLI Solutions, Rolls-Royce and Wilhelmsen Technical Solutions. It is now looking increasingly likely that the vessel described in our Barge design feature, or something very similar, will be in service much sooner than many would have expected. While what awaits the industry in the next few years is of considerable interest, Sandra’s feature on Risk Management is a timely reminder that companies have got to survive now – and it seems that task is only getting tougher. For bunker suppliers, a major challenge is having to act more in the role of a bank extending credit to its customers, and to bear that extra risk in a volatile environment. Meanwhile, for owners, bunker costs represent between 50 per cent and 70 per cent of the daily running costs of an average vessel, Christel McLoughlin, director of risk management at kPI Bridge Oil, pointed out at the IBIA convention. She argued that risk management takes away price uncertainty and that hedging is not a form of speculation. doing nothing, she said, equated to speculating on bunker costs. While Hong kong may be still fresh in the memory, it is already time to turn our attention to the next big IBIA event – the annual dinner in London in February. See you there! David hughes, Editor

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Hydrocarbon Engineering - Full page 216 mm x 303 mm 6-20-13

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WINTER 2013

Publisher: W H Robinson Editor: David Hughes editor@mar-media.com

Deputy Editor: Sandra Speares sandra.speares@mar-media.com

Project Director: Dawn Barley dawn.barley@mar-media.com

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

Designer: Justin Ives

Published by: Maritime Media Ltd Suite 25, Hurlingham Studios, Ranelagh Gardens, London SW6 3PA, UK Tel: +44 (0) 20 7386 6100 Fax: +44 (0) 20 7381 8890 E-mail: inbox@mar-media.com Website: www.worldbunkering.com

justindesign@live.co.uk

ANDROID APP ON

THE ONLY OFFICIAL MAGAZINE OF

The views expressed in World Bunkering are not necessarily those of IBIA, or the publishers unless expressly stated to be such. IBIA disclaims any responsibility for advertisements contained in this magazine and has no legal responsibility to deal with them. The responsibility for advertisements rests solely with the publisher. World Bunkering is published by Maritime Media Ltd on behalf of IBIA and is supplied to members as part of their annual membership package.

ISSN 1367-5018

Š The International Bunker Industry Association Ltd This publication is printed on PEFC certified paper. PEFC Council is an independent, non-profit, non-governmental organisation which promotes sustainable forest management through independent third party forest certification.

On behalf of: IBIA Ltd Latimer House 5-7 Cumberland Place Southampton SO15 2BH, UK Tel: +44 (0) 20 3397 3850 Fax: +44 (0) 20 3397 3865 E-mail: ibia@ibia.net Website: www.ibia.net

Visit online, with Page-Turning technology at

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Contact: Shazmeer Jiwan Alba Petroleum Ltd PO Box 97155 Mombasa, Kenya Tel: + 254 734 539777 + 254 720 630000 Fax: + 254 20 2689549 Mobile: + 254 734 575744 E-mail: sales@albapetroleum.com

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WINTER 2013

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Editor’s letter Chairman’s introduction Chief Executive’s report New members Events report Noticeboard Annual general meeting

Interview Barge design Industry news Environment Blending Additives Testing Risk management

IBIA REPORtS 1 7 9 10 13 14 15

SPECIAl fEAtuRES 17 19 21 23 30 37 39 41

GEOGRAPHICAl fOCuS North America 44 Caribbean, South and Central America 47 Africa 53 Russian update

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Innovation Legal news Equipment and services Review: IBIA Annual Convention – Hong Kong Review: LISW

64 67 69 71 74

Diary

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41

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F

ellow IBIA members, those of you who were able to attend our Annual Convention in Hong kong will know without me saying that it was a resounding success. For those who were unable to be with us I can tell you that this year's gathering scored top marks for: being informative, providing an enjoyable networking opportunity and, most importantly, taking IBIA forward in terms of what we want to do as an association, and how we intend to do it. Hong kong is one of the two Special Administrative Regions of the People's Republic of China, the other being Macau. It is a small but fascinating place that is continuing to forge ahead on so many fronts, one of being them maritime commerce in all its forms. It was for that reason we chose Hong kong for this year's location and the input from our several Hong kongbased speakers certainly contributed to the convention's success. The convention is now disappearing astern but I would like to thank, on behalf of the IBIA board, those who worked so hard to make it happen. Firstly our sincere thanks to the Secretariat for their diligence and hard work in bringing the convention together. In particular Anna Trant, who only joined at the end of April, picked up the baton and ran with it, not only delivering a superb convention but also bringing in some successful innovations. Our thanks also go to the convention working group who gave direction to the whole three-day event and to Robin Meech who so professionally chaired the convention. Then there are those who make IBIA what it is, the volunteer members who identify sponsors, speak with nonmembers, use their contacts to unearth challenging and topical speakers, you

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know who you are and know also that you are greatly appreciated. Stand up and take a bow. Thanks too to the Sheraton hotel and its excellent staff for looking after us so well. A great convention needs a top class venue, and we certainly had that. Last but definitely not least, thanks to our sponsors who are essential to all our activities. We hope you draw benefit from the exposure and we look forward to your support at IBIA events in the future. These thank-yous may sound like the credits of an Oscar-winning film, but a convention is an epic. It too has to have leading players and a cast of hundreds and without financial support it will stay on the shelf. What will the New year bring? The convention gave us some indicators for the future. If the industry takes the advice of Christel McLoughlin, director of Risk Management, kPI Bridge Oil, hedging will become standard practice for shipowners. She stressed that hedging is not speculation but a rational way of limiting risk in the face of volatile oil and bunker prices. The Maritime & Port Authority of Singapore's (MPA) Assistant director (Marine Services department), Chin Chin Ang explained to delegates why the MPA is to make mass flow meters mandatory. This is a highly significant move. The question now is: will other national authorities follow and change a key component of the bunkering process. Christine Loh, the Hong kong SAR government's under Secretary for the Environment, outlined how Hong kong's voluntary emissions control scheme is developing into a new law that will come into force in 2015. And, while an official Chinese emissions control area may be some way off,

it is looking increasingly likely that similar controls will soon be in place throughout the Pearl delta. The developments in Hong kong underlined the pressure now coming on the shipping industry to adapt to increasingly low sulphur limits. LNG is now in use as a marine fuel and it is likely that the infrastructure for LNG bunkering will be put in place over the next few years. On the other hand abatement technology is fast becoming an accepted method of avoiding fuel switching in ECAs. We face many challenges but also much to look forward to. IBIA will continue to work with international, national and shipping industry organisations to forge ahead with sustainable, efficient and environmentally friendly policies that support growth. Finally I look forward to seeing as many of you as possible at the IBIA Annual dinner in London on the 17th February 2014. I wish you all the best for 2014.

Chairman’s welcome

Resounding success

Simon Neo Chairman, IBIA

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itting on the plane returning from Hong kong gave me the opportunity to reflect on what was, in my view, a very successful convention for the International Bunker Industry Association (IBIA). Comments from the delegates and their feedback forms support this view. It was also the individual conversations and conference interaction that inspired and encouraged me. The bunker industry is alive and kicking, with a very strong appetite for greater membership involvement and a desire for IBIA to tackle the thorny issues. A comment that returned time and again was: “Can IBIA provide good, clear guidance to the industry – there is so much inaccurate information out there!” I am pleased to say we are already on that course, and our engagement with the wider shipping community is gaining momentum. In the past weeks, IBIA has taken part in bunker forums with the International Association of Independent Tanker Owners (INTERTANkO), the International Chamber of Shipping and the Baltic and International Maritime Council (BIMCO), looking at the revision of the bunkering guide to good practice and bunker contracts. We are also in the process of lobbying the International Maritime Organization (IMO) to bring forward the Fuel Availability Study and have been speaking with a number of shipping associations and national governments about supporting development of the industry with best practice. Conference topics

Our choice of conference topics also demonstrated that IBIA is prepared to tackle some of the challenging issues that face the industry. These will be covered in greater depth in this issue; IBIA does not want to shy away from such debates and, in fact, the contrary is true. IBIA looks to be

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transparent and to be at the centre of change – informing, educating and presenting the membership views with strength. For the first time, we used technology to capture the opinions of attendees. Hard evidence is vital to determining effective and decisive action. I appreciate that this was just a snapshot of the membership, but it does give a reflection of your priorities for the association and thoughts on participation, education and training and a whole range of topics. I propose to set out in detail the opinions expressed in the spring issue of World Bunkering. regional meeting

Hong kong also provided the opportunity for the regional chairs, executive committees and the wider secretariat to meet and discuss common issues, to look at the global events of IBIA and at its strengths, synergies and opportunities to learn. This was the first time such a meeting has taken place and, as IBIA grows, will become more important to ensure the membership receives value for money.

to expand upon these initiatives in the next issue. The ongoing theme was to communicate more effectively with you and the wider shipping community and to deliver locally, regionally and internationally. 21st annual dinner

2014 is only a few short weeks away and the IBIAs annual dinner is not only one of the first events of the year, it is one of the events of the year. If you want to be one of the 1,000-plus attendees, you will need to act fast, as ticket sales have already outstripped previous years. That isn’t surprising, as this year is even more special than usual, for IBIA’s 21st birthday celebration will also be taking place at the annual dinner in the Grosvenor House hotel on the 17 February. It is an extraordinary event and one not to be missed by anyone with a serious interest in maintaining a presence in the industry. I look forward to seeing as many of you as possible there.

Chief Executive's report

Membership participation is key to IBIA’s growth in 2014

Captain Peter hall

Board meeting

Hong kong was also the venue for the IBIA board meeting. The board has a monthly teleconference and meets in person twice a year. The face-to-face meetings provide the opportunity to discuss strategic issues in depth. The outcomes from this board meeting were to look at developing a new, more dynamic and informative website, assessing the ongoing activity of the working groups, reviewing membership benefits and assessing regional spread. There was also an initiative to capture IBIA’s story – the past the present and the future – in a promotional video; again, I will be able

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New members CORPORATE

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CORPORATE AddITIONAL

BuNkER TRAdER Frost, Allan ENDOFA DMCC JBC 1, Office 2208, Cluster G Jumeirah Lakes Towers P.O. Box 478545 dubai uAE E-mail: af@endofa.com

BuNkER TRAdER Soendergaard, ken ENDOFA LLC 3730 kirby drive Suite 1101 Houston TX 77098 Texas, uSA E-mail: ks@endofa.com

BuNkER TRAdER Ally, Melvin BEtA MArINE FuELS PtE LtD No. 10 Anson Road #33-17 International Plaza 79903 SINGAPORE E-mail: melvin@betamarinefuels.com

BuNkER TRAdER Atkinson, Mistika BEtA MArINE FuELS PtE LtD No. 608/1/1 Ascon Tower Baseline Road Colombo 09 900 SRI LANkA E-mail: mistika@betamarinefuels.com

SERVICE Panousis, Panos INFOSPECtruM LtD 60 St. Aldates Oxford OX1 1ST uk E-mail: panos@infospectrum.net

SERVICE Loh, Ven INFOSPECtruM LtD (ASIA) 41A kreta Aya Road 89003 Singapore E-mail: asiapac@infospectrum.net

BuNkER SuPPLIER Brunings, Leon StAAtSOLIE MAAtSChAPPIj SurINAME N.V. Sir Winston Churchillweg BR 309 Paramaribo 4069 Suriname lbrunings@staatsolie.com

SERVICE Hasslacher, Simon INFOSPECtruM LtD (AMErICAS) Calle 95, No 13-55 Oficina 203 Bogota Colombia E-mail: americas@infospectrum.net

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MarinhaTotems_178x124.pdf 1 07-01-2013 12:27:01

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New members

INdIVIduAL BuNkER BROkER Cagatay, Ahmet BuNkErISt trADINg & BrOkErINg Semsettin Günaltay Cad. Ortayo Sok skenderolu Apt. No:14/10 34744 Bostanc,kadköy Istanbul 34744 TuRkEy E-mail: ahmet@bunkerist.com SERVICE Tufekci, Mehmet Hakan YALCIN & tOYgAr & tuFEkCI LAW OFFICE Inebolu Sok. Ada Apt. no. 25 d.11 34427 Setustu kabatas Beyoglu, Istanbul 34427 TuRkEy E-mail: hakan.tufekci@yttlaw.com BuNkER SuPPLIER Schalkwyk, Corne' BAChMuS OIL & FuEL SuPPLIES PtY LtD No. 156 Circumferrential Road Walvis Bay Industrial Walvis Bay 9000 NAMIBIA E-mail: corne@bachmus.com.na SERVICE kabir, Sardar uk MArINE SurVEY LtD Navigation House Suite 205, Port of Tyne South Shields Tyne & Wear NE34 0AB uk E-mail: contact@ukmarineinspections. co.uk

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BuNkER TRAdER Lintott, Robert N/A 1000 Lafitte Street Mandeville LA-70448 uSA E-mail: blintott@msn.com SERVICE kanason, Easwaran P ASIA EDgE PtE LtD 88 Joo Chiat Road #02-01 427382 SINGAPORE E-mail: easwaran@asiaedge.com BuNkER SuPPLIER Fanuswala, Mohammed Jabir grEAt DOLPhIN PEtrOLEuM DMCC 2606, 26th Floor Tiffany Towers Jumeirah Lakes Towers dubai uAE E-mail: mohdjabir@greatdolphin.org SERVICE Lim, Anthony I.h.S. gLOBAL PtE LtD 8 Marina View #12-01 Asia Square Tower 1 18960 SINGAPORE E-mail: anthony.lim@ihs.com BuNkER SuPPLIER day, Adele INtEgr8 FuELS SOuth AFrICA (PtY) LtD 8 Riebeek Street Norton Rose House, 17th Floor Cape Town 8001 SOuTH AFRICA E-mail: adele@integr8fuels.com

BuNkER TRAdER Reuter, Andreas PEtrOL BuNkErINg & trADINg gErMANY gMBh Lohe 43F Hamburg d-22397 GERMANy E-mail: andreas.reuter@petrolbunkering. com BuNkER SuPPLIER Chan, Pui Nang ChEVrON hONg kONg LtD 15/F Tower B, Manulife Financial Centre 223-231 Wai yip Street kwun Tong, kowloon HONG kONG E-mail: edmondchan@chevron.com SERVICE Fong, Phileas hONg kONg SALVAgE & tOWAgE TyTL, 108 RP, Sai Tso Wan Road Tsing yi Island New Territories HONG kONG E-mail: pfond@hkst.com SERVICE Apolo Teran, Jose M APOLO & ASOCIADOS Junin 105 and Malecon Simon Bolivar, 6th Floor "Vista al Rio" Building Guayaquil EC090103 Ecuador E-mail: jmapolo@lawyersecuador.com BuNkER SuPPLIER Akachukwu S.A, Prince SkYShOrE ShIPPINg & ENErgY LtD 1B IBRO Avenue, Trans Amadi, PortHarcourt, 500003 NIGERIA E-mail: aka@skyshoregroup.com

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hong kong

The IBIA’s main events focus for the past months has been the annual convention in Hong kong, which took place early in November. We were pleased to welcome 110 attendees from 23 countries to an event that combined some ‘off-the-beaten-track’ presentations (for example, taking a look at security issues in emerging markets) with updates on key industry topics and a popular networking programme. We were honoured to welcome Joseph Lai, Permanent Secretary for Transport and Housing (Transport), and Christine Loh, under-Secretary for the Environment, who gave insight into the thriving port of Hong kong. On a more informal note, our convention dinner started with a stunning night-time trip across Hong kong harbour, culminating in dinner under the stars at the Royal Hong kong yacht Club. If the conversation level was anything to go by, plenty of networking took place! The end of the convention was marked by an afternoon aboard the Bounty, an exceptionally relaxed end to a busy and productive few days.

organisers have kindly agreed to let our convention delegates join the party so, if you’re not a member of their association, it’s a once-in-a-lifetime opportunity to attend the event. Eisbein is the culmination of a week of shipping gatherings in Hamburg, which attract 18,000 people to the city. The social programme for our convention is already promising to be one of the best yet, and we have a whole year to polish off those plans… More to come soon. IBIA annual dinner

Next on the IBIA calendar is the annual dinner at the Grosvenor House Hotel in London. Tickets went on sale early this year and bookings are flooding in. The event is on Monday 17 February; it is a great networking opportunity and a good chance to catch up with old friends. Expect some surprises, as it is the IBIA’s 21st birthday and we intend to celebrate in style! The earlier you book, the better your table position, so don’t delay – visit

www.ibia.net now. We also have a variety of sponsorship packages available that are being snapped up fast. Contact Anna Trant (anna.trant@ibia.net) for details. IBIA events calendar 2014

And, lastly, we are reviewing our whole events programme and are making plans to revamp and revitalise what we offer. Expect to see new additions to our portfolio as we roll out a programme of seminars and other events around the world. The IBIA seminar at London International Shipping Week in September was the scene for keen discussion on how London is responding to Asian growth. For the future, you can expect more on this model: a to-the-point presentation session on key industry issues, the odd thoughtprovoking subject to give you something new to think about, and a networking drinks reception to round off a half-day well spent. Our next stop is Gibraltar – more information coming soon.

Events manager report

Our next stop

hamburg 2014

2014 is the turn of Hamburg, so put 4-6 November 2014 in your diary. The convention will be during the week of Eisbein: what has to be one of the biggest meals ever staged by the industry! Over 5,000 members of the German Shipbrokers’ Association sit down to consume pork knuckle and beer in a tradition that goes back 65 years. The

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Noticeboard

IBIA noticeboard Benefits to members as at 1 November 2013

MEMBERSHIP COSTS

Individual membership: £150 Corporate membership: £700 Corporate additional membership: £150

annual increases. These increases took effect on 1 July 2012 and in future there will be small Additional te Corpora listing of practice The Board has also decided that the present have changes some and needs s’ member Members does not properly and fairly meet ship to member of benefits the match ly accurate more will therefore been introduced that iat. Secretar the by directly d contacte be will s its cost; affected member If you have any queries or comments about these changes, then please contact ibia@ibia.net or telephone: +44 (0) 20 3397 3850.

IBIA PUBLICATIONS AND BENEFITS IBIA World Bunkering Magazine – free copies for Members of IBIA

Please note non-members are requested to subscribe to the magazine at a cost of Pounds Sterling £45, £60 or £80 depending on location. up to 20 additional free copies of the magazine are offered to buyer members of IBIA for forwarding to their vessels. IBIA World Bunkering Magazine – discounts on advertising

discounted advertising rates are available for members with savings dependent on the advertisement size. Please contact the Advertising Sales Team at Maritime Media London on + 44 (0)20 7386 6100 IBIA List of Members

If your details are not correct, please let the IBIA administration know at ibia@ibia.net. This publication is only available to members. IBIA guide to In-Line Blending

Available free of charge to members IBIA guide to Avoiding and resolving Bunker Disputes

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

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Evaluate the Merits of a Bunker Claim

Interpretation of specifications for bunker fuels and a guide to the question of repeatability. For sale to non-members at £35. IBIA glossary of Bunker and Lubricating Oil terminology

A comprehensive guide to all those complicated terms that are in daily use in the bunkering industry. For sale to non-members at £45. IBIA guide to good Commercial Practice

On sale to non-members at £50 per copy. IBIA Safety Cards for vessels’ crews

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

Free bromide supplied for use by corporate members only.

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Monday, 17th February 2014 @ 15.00hrs NOTICE IS HEREBY GIVEN THAT

The 20th Annual General meeting of the Association Will be held at: The Cunliffe-Owen Room The Naval Club 38 Hill Street London

20th Annual General Meeting

20th Annual General Meeting

EVERY MEMBER HAS THE RIGHT, UNDER THE COMPANIES ACT 2006, TO APPOINT A PROXY. SHOULD YOU WISH TO DO SO PLEASE CONTACT THE IBIA ADMINISTRATION TO OBTAIN A FORM By order of the Board Simon Neo Chairman World Bunkering Winter 2013

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The International Bunker Industry Association

Join IBIA today Why Join IBIA? Are You a Bunkering Professional? Involved in the supply of bunkers to vessels? Want a direct line to IMO decision making? Want network access to over 600 professionals and their organisations?

LEVELS OF MEMBERSHIP Corporate:

A corporate membership allows a corporation to register up to two other offices and contact details FOC. They can send as many employees of any registered company to events, training courses and working groups at member rates. They are able to delegate to different members within the registered companies to attend committees. They are eligible to book tables at the IBIA Annual Dinner. They are able to use the IBIA logo on the website and business stationery. They will receive three free subscriptions to World Bunkering. (This is up to 20 for Buyer members) This level of membership is designed for companies

Benefits allow companies

• • • •

Discounts to training courses, IBIA endorsed events - for all employees Book tables at the prestigious Annual Dinner Use of IBIA logo on their web site and stationary Subscription to World Bunkering magazine

Individual:

This allows one person to register as a member in their own name. You will receive one set of free publications and one subscription to World Bunkering. All special rates and attendance at events will be limited to this member only.

Membership Options:

Recognition for your expertise?

Individual: £150.00 p.a Corporate: £700.00 p.a

t Join today online a

(e) ibia@ibia.net (t) +44 (0)20 3397 3850

www.ibia.net

QR Reader for iPhone and Android

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Interview

A foot in both camps Sandra Speares talks to Inatech's Alok Sharma, who says his company works on “both sides of the manifold”

I

T services and consulting company Inatech has “marine fuel in its dNA”, according to head of marine Alok Sharma. It focuses on the manufacturing, retail and distribution sectors, with the marine solutions business unit focusing specifically on shipping and bunkering. “We create fuel management platforms for shipping and bunkering companies,” Sharma explains. For shipping companies, the company has a product called ShipTECH, which is an intelligent buying platform, while for marine fuel suppliers there is BunkerTECH, which he describes as “an intelligent selling platform”. The company therefore works on “both sides of the manifold” he says, which he believes puts it in a unique position. “Everyone is very wary when they are buying or selling oil, he says, and creating a platform that integrates and brings a level of transparency between suppliers and consumers allows for better communication to take place. We like to think that better communication is the first layer on which you can start building trust.” Sharma says that the traditional procurement platform has been created to procure physical things that are all the same. Oil, however, is different because there are quality and quantity checks, testing and laboratory involvement and a lot of information is exchanged.

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He says he feels that if this information is consolidated in one platform, the “comfort level” is increased. The companies using the platform can conduct the entire operation, including procurement, delivery and quality and quantity testing and claims if necessary, which means that as a buyer “you are able to understand who your best suppliers are and do more business with the suppliers that you like”. As a supplier “you are able to see who the best buyers are”. This creates a better procurement environment, Sharma says. With average transactions of $700,000 to $1.2 million and with shipping companies carrying out three to four transactions a day, a lot of money is involved, he says.

The platform operates on a strategic level, taking into account risk management and vessel portfolios, as well as on a tactical level, allowing the user to conduct better negotiations and plan and time purchases more efficiently. Lastly, an operational level avoids last-minute bunkering and ensures that you get quality.

Alok Sharma

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Interview

The hot topic for a marine fuel supplier these days is credit, Sharma says. Even a rough calculation involving a supplier providing 30,000 tonnes at $650 per tonne over 45 days adds up to the supplier needing a multi-million-dollar credit line from the bank to finance the shipping company. From a sales perspective, the supplier must therefore ensure that the company is credit-worthy and also hedge the risk, because the sale is often on a fixed-price contract. As well as helping companies manage finance and operations better, the Inatech tool helps with inventory management and quality issues, such as whether the fuel is on spec. Looking at the macro picture as far as fuel oil is concerned, Sharma says there are two key drivers. The first is that there is likely to be a shortage of fuel oil in the next three to five years, because refining capacity is getting into distillates, and refineries do not want to produce fuel oil, and within it, bunkers are “the bottom of the barrel”. From a demand point of view, things are also changing, because the three biggest consumers of fuel oil are power, industry and bunkers. While demand for bunkers is expected to remain steady, power and industry will be consuming less and less, Sharma explains. Currently, about 11% of the barrel is fuel oil, he says. “In the next 10 years, that is going to decrease to 4%.” Refineries are in the process of creating sulphuric acid for sale to fertiliser companies as well as petroleum coke, which is a coal substitute for which demand is stronger than for fuel oil. Shipping at this juncture is having to look for substitutes, because of new regulations coming into force, and that uncertainty is leading to price volatility, Sharma says. At present, 85% of what is being burned is high sulphur and this will have to change radically within the next five years to meet regulatory demands. While he does not expect that 2020 global cap deadline to be put back to 2025, Sharma says there may be some negotiation over certain categories of ship. The three alternatives available

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to deal with the issue are scrubbers, LNG and/or alternative low-sulphur products. He believes the third should be the centre of the industry’s attention. Retrofitting scrubbers, he believes, is too costly, and the return over the life of the ship is not guaranteed. Getting rid of the waste water, which will contain sulphuric acid, is also a problem. As far as LNG is concerned, the infrastructure is lacking at the moment, he says. He adds that LNG is not yet freely traded on the market and that prices may begin to go up once it starts being freely traded. “Our bets are on ultra-low-sulphur alternatives,” Sharma adds. He believes that supplies will be there in time to meet regulatory requirements – but at a price. “I think that the industry will have to adjust to a different level of cost.” Once the demand for lowsulphur goes up, it “will probably start tracking marine gas oil or diesel”. Bunkering faces three challenges – quality, credit and regulations, he says. There have been concerns, for example, about off-spec bunkers, which could be a claim waiting to happen in jurisdictions such as the uS, which have introduced lowsulphur requirements. In cases where suppliers are providing fuels that are just under the one per cent sulphur limit, for example, there is a risk of contamination. Quality is an issue and will continue to be so, and Inatech is seeing that in the demand for enhancing the ShipTECH claims module. The module can manage a claim and incorporate bunker delivery notes, lab reports and price. Companies want to track more information through the module because they are wary of claims coming up, he says. Another driver for claims is cat fines. Some marine fuel companies are using a material called faujosite, which means that, in addition to aluminium and silicon as catalysts, there is now sodium, calcium, magnesium and potassium, which means more sediment, Sharma explains. unless labs test for these particular materials, they will not catch them, so shipping

companies must specify that these tests are carried out to catch all the catalysts in the fuel, he says. “Shipping companies need to be more aggressive in testing the fuels that they buy,” he says. With the move towards establishing emission control areas, shipping companies are going to have to be very careful to make sure that the quality of the fuel they use is not only on spec but helping to protect the value of their asset. That is to say, the fuel must meet the engine manufacturer’s requirements. As far as credit is concerned, the fact remains that marine fuel suppliers have to fund the shipping companies, and most of these are relying on supplier finance. “The whole industry is on credit,” Sharma says. “If you look at freight rates, these are on 20 days' credit as well”, so the shipping company only gets paid 30 days after it delivers the service. Sharma does not see this dynamic changing any time soon, and, for a marine fuel supplier, making sure that a shipping company is creditworthy and will be able to pay the bills is becoming critical. Suppliers are being very cautious about how they extend credit lines, and “are beginning to think more like banks do”. In the past, many deals have been done casually, but this is no longer the case. This is affecting business relationships, but Sharma says he likes to think that this is in a positive way. “you cannot get into a contractual agreement in the hope of being able to live up to it a bit late. If it is affecting relationships, then those relationships were, in my view, questionable in the first place.” The third major issue is regulation and how shipping is going to deal with it. Clean energy is a hot topic for government, and Sharma does not believe that any government will hold back on regulation. He believes there is not sufficient time to study other options for alternative fuels. From a system management point of view, Inatech tries to help its customers through better planning of how fuel is to be used, when it will be needed and what the price will be at that point.

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Barge design

The shape of things to come? NLI Solutions, Rolls-Royce and Wilhelmsen Technical Solutions have developed an LNG bunker barge concept

I

n recent months, moves towards the widespread use of liquefied natural gas (LNG) as a marine fuel have accelerated. Engine manufacturers have come out with dual fuel ranges of main machinery, while major ports around the world are looking closely at providing LNG terminals and handling facilities. The LNG powered vessels so far in service refuel alongside the quay, but, if the use of LNG is to become routine in the shipping industry, deliveries by barge will be essential in many places. Norway-based offshore oil and gas engineering specialist NLI Solutions says: “LNG bunker barges are often described as the ‘missing link’ in the LNG supply chain. Today, only one example exists, capable of carrying 187 cubic metres of LNG, even though ocean-going ships need to bunker several thousand cubic metres.” It adds that while LNG is among the cleanest and most cost-efficient options for low-emission shipping and interest in LNG as a marine fuel is rapidly increasing, the practical availability of LNG bunker facilities remains a limiting factor. NLI has developed a concept for a LNG bunker barge based on the NLI

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LNG tank design. The concept has been further developed in a design study with the marine division of Rolls-Royce and Wilhelmsen Technical Solutions (WTS). The HighTechBarge is designed to answer multiple demands for a costeffective, high-tech, high-volume barge. For safe operations and increased manoeuvrability, the HTB will be equipped with podded propulsion similar to those used in offshore support vessels as well as state-of-theart electronics for early threat detection. The NLI LNG tank is an atmospheric, prismatic steel tank, type ‘B’, with a capacity of 4,000 cubic metres of LNG. It will be fitted with a new insulation system with very low levels of boil-off gas. Onboard power and propulsion are fed by an environmentally friendly gas engine. The HTB has a large pressure tank on the aft deck for boil-off gas handling and gas delivery to engine. Since recondensation equipment is very expensive, takes a lot of space and has very low efficiency for small installations like this, excess boil-off gas can be delivered to a shoreside gas grid when the barge is not on bunkering operations. The barge can also deliver electric power to a shoreside electric grid.

technical specifications

Length overall: 63 metres. Beam: 20 metres. deadweight: about 2,000 tonnes. Service speed: 8 knots. LNG tank capacity: 4,000 cubic metres. CNG tank for compressed boil-off gas: 270 cubic metres. Aft deck contains compressors, vaporisers etc. Bunkering operations from tank top. Main engine and gen-set, size pending operation: Bergen C26:33 gas engine; Bergen C gas engines are available with powers from 1440kW to 2,430kW.

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Singapore Premium Bunkering Hub

Searights Maritime Services Pte Ltd Certificate of Accreditation: MPA/AS 04 001 80 Marine Parade Road #16-05/06/07/08 Parkway Parade Singapore 449269 Searights Ad Jan2013.indb 2013.indd 20 1 WB Book Winter

Tel: +65 6344 1108 Fax: +65 6344 1128 email: bunkers@searights.com.sg www.searights.com.sg 22/1/13 4:12 PM 25/11/2013 11:15


Global news

Global round-up All the news from around the world

Singapore LNg

Singapore has moved ahead in its development of practical operational procedures and standards for liquefied natural gas (LNG) bunkering and is linking up with Antwerp Port Authority and Port of Zeebrugge to establish common approaches. The Maritime and Port Authority of Singapore (MPA) and its appointed consultant, Lloyd’s Register, have completed their study, Technical Standards and Procedures for LNG Bunkering in the Port of Singapore. This consolidated the information that needs to be addressed before LNG bunkering can take place into five key areas. They are: bunkering standards and procedures; technical requirements and specifications for LNG bunker tankers and receiving vessels; safety standards for LNG bunkering operations; identification of safety exclusion zones and emergency procedures; and competency standards. The MPA says it will now be organising industry consultation sessions to share the results of the study with the maritime industry and seek feedback. It will subsequently finalise the LNG bunkering standards for the Port of Singapore. In November, MPA, Antwerp Port Authority and Port of Zeebrugge signed a memorandum of understanding on co-operation on: harmonising the LNG bunkering procedures, exchanging information on LNG as a marine

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fuel and on the required regulatory framework, identifying common areas of interest to set up joint research and development programmes. The agreement will be in force for three years. MPA chief executive Lam yi young said: “during the past two years, MPA has collaborated with industry partners to study the feasibility of introducing LNG bunkering in Singapore and to develop the procedures and technical specifications for LNG bunkering operations. Given the global nature of shipping, we are very happy to be able to work with the Antwerp Port Authority and the Port of Zeebrugge to harmonise our procedures for LNG bunkering. Such co-operation will help facilitate the development of global standards for LNG bunkering, which is needed to enable the use of LNG as ship fuel.” Aegean moves into uS East Coast

Major global bunker supplier Aegean Marine Petroleum Network Inc is buying the Hess Corporation’s uS East Coast bunkering business for $30 million, plus an amount to be paid for inventory, and subject to customary closing conditions. The deal was expected to be completed during the fourth quarter of 2013. Hess Corporation is currently the leading marketer of marine fuels along the uS East Coast. The Hess bunkering operation and associated assets supply the heavily trafficked ports of New york, Philadelphia, Baltimore, Norfolk and

Charleston, and include approximately 250,000 cubic metres of leased tank storage. during the past three years, these bunkering operations averaged 1.8 million tonnes in annual sales. Aegean said the move not only marked its entry into supplying customers in the uS but also enabled Aegean to “meaningfully expand its global full-service marine fuel platform and increase its exposure to uS clients worldwide, including leading cruise lines”. The company’s president, E Nikolas Tavlarios, said: “We are pleased to further diversify our geographic mix by capitalising on this attractive, accretive opportunity for uS East Coast expansion. Hess Corporation has built a tremendous network and we are excited to apply our expertise and capabilities to these established operations. This transaction will require minimal startup costs and is fully aligned with our objective of strategically expanding our global presence while leveraging our existing infrastructure to increase revenues. We are confident that these operations will strengthen our business portfolio, bolster our customer reach and create meaningful value for our shareholders.” geos group’s first barge delivery

uk-based marine gas oil (MGO) supplier Geos Group has started offering ship-to-ship transfers of fuel at the country's east coast ports. “We were

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delighted to be able to help one of our customers recently with our first shipto-ship fuel transfer,” said managing director Barry Newton. “An offshore support vessel needed fuel in port, but with no ex-pipe supply available, it was facing an extra journey and a lengthy delay in its programme. We were able to berth alongside and fuel the vessel during its operations and got it on its way quickly.” The Geos Group has products at Lerwick, Aberdeen, Peterhead, Heysham and the Thames and the 4,449 dead weight tonnage (dwt) bunker tanker Stolt Sandpiper for deliveries. In November, Geos and the Port of Blyth announced an agreement to build a new fuel storage facility at the port’s Bates Terminal. The initial phase of development will see the construction of three storage tanks by mid-2014, providing a capacity of over 15 million litres, with further expansion planned. Newton said: “We chose Blyth for its strategic location and ambitious expansion plans and look forward to working with the port and regional partners during an exciting period of growth.” gB Oils becomes Certas

uk-based marine fuel supplier GB Oils has announced that it will now operate as Certas Energy. A statement said: “The new brand is designed to reflect the ambition, customer offering and size of the company.” The company supplies all grades of marine fuel, including both high and low-sulphur intermediate fuel oil (IFO) and marine gas oil (MGO), as well as lubricants, and has ex-pipe facilities in Aberdeen.

Gary Byers, head of marine for Certas Energy, said: “The new brand gives us a fresh new platform to promote our services and the standards that we work to, and will help us to drive more organic and acquisition growth.” He added: “In recent years, the marine division has experienced significant expansion, as have other sections the business is involved with. In the process, we’ve evolved into something more than the GB Oils brand. We’ve therefore refreshed the company with a new and exciting brand identity that we feel more accurately reflects what we’re about as a business – our drive for growth and our ambition and dedication to the customers we serve.” uS tug owner fits emissions kits

uS tug and barge operator Harley Marine Services has fitted Caterpillar’s Cat3500 marine emissions kits, becoming one of the first vessel operators in North America to adopt the technology. Caterpillar agent Peterson installed the 3500 emissions kits on six Cat 3516B marine engines in three different tugs, upgrading each vessel from uS Environmental Protection Agency (EPA) Tier 0 exhaust emissions standards to Tier 2 while, Caterpillar says, simultaneously improving the efficiency of their vessels. Caterpillar says that, as well as the compliance and environmental benefits, an upgrade from a mechanical to an electronic EPA Tier 1 or Tier 2 configured engine can also result in numerous operational improvements. These benefits include improved diagnostic and display capabilities as well as smoother overall operation.

The engine manufacturer says that an upgrade can also result in lower vibration and noise levels, and significant fuel savings. gibraltar StS move ‘positive’

The move by Gibraltar this year to ban outside-port-limits ship-to-ship (STS) transfers has not had the feared negative consequences, captain of the port Roy Stanbrook told World Bunkering. He said that the move, announced by minister for the port Neil Costa, had been designed to completely clamp down on would-be polluters and considerably strengthen environmental legislation. He added that Gibraltar Port Authority now offers STS operations only within British Gibraltar waters and has abolished activities associated with Gibraltar outside the jurisdiction. While he did not mention the current dispute with Spain, which does not recognise Gibraltar’s territorial waters, the move highlights the territory’s determination to continue to be a major bunkering hub. On the new STS regulations, Captain Stanbrook told World Bunkering: “When the move was introduced, it was feared there would be a drop in trade, but the outcome has been positive, generating even more income, with between three to four STS operations each week.” He added: “The port has allocated a priority anchorage for this purpose, resulting in healthy demand. These operations in a controlled environment within territorial waters rather than in unregulated waters are stringently inspected and regulated to ensure compliance with local and international guidelines and regulations.”

gas oil tanker hijackings

Two small tankers carrying marine gas oil (MGO) have been hijacked and the cargoes stolen in recent months in the South China Sea and Malacca Strait area. In October, the 1986-built, 1,924dwt tanker Danai 4, with a crew of 15 on board, was on passage from Singapore to an anchorage off Vietnam when she was attacked. No injuries were reported, but her cargo was stolen before the Thai-flag vessel was released. In November, pirates hijacked the 3,254dwt, Panama-flag GPT 21 and again stole the gas oil cargo before letting the ship go. A spokesperson from the International Maritime Bureau told World Bunkering that the incidents were of concern. He said that it had been some years since hijackings and thefts of cargo had been a problem in South East Asian waters. He said that it was not known what was happening to the stolen fuel.

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ECSA concern at EU CO2 proposals

ARE YOUR BUNKERING NEEDS A PUZZLE?

Environment

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he European Community Shipowners’ Associations (ECSA) has given a qualified welcome to a European Commission proposal for a monitoring, reporting and verification (MRV) system for CO2 emissions from maritime transport. An ECSA position paper says that the proposal is “a contribution towards finding an appropriate global solution for CO2 monitoring from international shipping European shipowners”. However, it also stresses that any mandatory requirements on MRV for the international shipping sector must be agreed upon at International Maritime Organization (IMO) level, “as this is the only way of securing a globally harmonised system”. ECSA says that it considers that reporting of commercially sensitive cargo information per ship is premature. “Publication of such data would, in any case, be unwarranted,” it warns. As a potential way ahead, ECSA recommends an MRV system that solely includes the aggregated data from ships’ fuel consumption in combination with distance sailed. This combination would substantiate shipping’s advantages as the most energy efficient and environmentally friendly mode of transport and allows the correlation of trends of CO2 emissions with already available data on world trade. Overall, ECSA says, the proposed MRV system should ensure that the realities and practicalities of the shipping industry enable a CO2 monitoring system that is workable both for the industry and for the authorities. ECSA cautions that its support in principle for an MRV system does not imply that ECSA would accept MRV being used to establish regional market-based measures, mandatory application of energy efficiency improvement measures or indexing for existing ships. The position paper continues: “Whilst acknowledging the expressed long-term intention of further improving the environmental performance of the existing fleet, ECSA considers it premature for the European union to go along this path. detailed input values for operational efficiency vary to a degree where any averaging and aggregation would

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make the result useless. Calculating such gross average indices for operational efficiency would expose the commercial viability of ships in a manner that is unjust and misleading.” ECSA also casts doubt on the value of the information that would be gained, saying that a transport work value, expressed in CO2 emissions per distance travelled per amount of cargo carried, suggests comparability over a large range of ship types and transport routes. ECSA says that it doubts the validity and feasibility of such a system. ECSA notes: “Ships operate in an environment that produces many variables that can be under the control of different parties (whether the owner, the technical operator, the commercial operator or the charterer) and that influence its performance. Each individual ship achieves its service and transport performance within an individual transport environment subject to constant variation of economic aspects (fuel price, freight rates), operational aspects (amount of cargo carried, speed, route, ballast legs) and environmental aspects (current, weather and sea conditions, winter and ice navigation). These factors would even make it difficult to compare sister ships in the same trades, or seemingly identical voyages of the same ship during different seasons. Any attempt to formulate emissions regulations that ignores [these facts] is therefore bound to be ineffective.”

French move causes concern

The International Chamber of Shipping (ICS), the global trade association for shipowners, has written to the French government to raise concerns about a new requirement for foreign shipowners to provide information to their French customers about CO2 emissions, using a detailed methodology that has not been discussed internationally. ICS believes that the unilateral application by France of these new CO2 reporting requirements to foreign ships cuts across the principles of global regulatory uniformity and the primacy of IMO as the regulator of international shipping. The new and very detailed rules that have been added to the French Transport Code apply across all transport modes, although the director-general for maritime transport is responsible for their enforcement in the maritime sector. ICS has therefore suggested that the director-general for maritime transport should advise that these requirements will not be enforced on international shipping pending the outcome of discussions on the monitoring and reporting of fuel consumption and CO2 emissions currently taking place at the IMO. The IMO Marine Environment Protection Committee is now in the process of developing global regulations for the mandatory monitoring and reporting of fuel consumption and CO2 emissions by ships trading internation-

ally. ICS fully supports the development of these measures at IMO and wishes to avoid any impediment to their adoption for global application. Simon Bennett, director, external relations, at ICS, explains: “We anticipate that the methodology for reporting that will be agreed by IMO member states through amendments to the MARPOL Convention on marine pollution will be very different to the methodology specified by the new French requirements. The IMO requirements should also be tailored to the special characteristics of international shipping, and will be the product of international consensus.” “The immediate implementation of these French regulations is a real concern because shipping is a global industry requiring adherence by governments to a uniform global regulatory framework if it is to operate efficiently,” he continues. ICS has reminded France of the difficulties that would be created if other coastal states were to implement their own unilateral requirements for the reporting of CO2 emissions by ships. Bennett adds: “The global maritime transport system would be very challenged indeed by the administrative burden of providing information that required the use of different methodologies and national formats for reporting, given that cargo ships can call at a very large number of countries during the course of a year.”

uS ponders new oil transfer rules

The uS Coast Guard (uSCG) has announced that it is considering new measures to reduce the risk of oil spills in “oil transfer operations from or to a tank vessel”. docket No. uSCG–2013–0522 requests public input. It says that comments and related material must be submitted by 22 November. The uSCG says applicable regulations that address reducing the risk of oil spills require it to promulgate additional regulations to reduce the risk of oil spills in operations involving the transfer of oil from or to a tank vessel. It says it intends to focus on operations that have the highest risks of discharge, including operations at night and in inclement weather. The statement says: “We are considering whether to establish new regulations or amend existing regulations for the use of equipment, such as putting booms in place for transfers, safety, and environmental impacts; and operational procedures, such as manning standards, communication protocols, and restrictions on operations in high-risk areas. We are also taking into account the safety of personnel and the effectiveness of available procedures and equipment for preventing or mitigating transfer spills.”

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Shipping companies are still trying to understand the detail of the new CO2 reporting requirements, the English translation of which has only recently come to the attention of the global shipping industry. But serious concerns are already being raised by international companies about the validity of the methodologies that have been developed by France, as set out in the Methodological Guide for Transport Services produced by the French Ministry of Ecology, Sustainable development and Energy. The development of a global system for the monitoring and reporting of CO2 emissions from ships will be considered by the next meeting of the IMO Marine Environment Protection Committee in March 2014. It is also the subject of a draft Eu Regulation proposed by the European Commission.

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TAKing THE PUZZLEMENT OUT OF YOUR BUNKERING NEEDS

Pollution law enforcement guide

The European Maritime Safety Agency (EMSA) has published a guide aimed at assisting authorities to enforce laws against pollution by vessels. The agency says that, since directive 2005/35/EC – which addresses ship-source pollution and the introduction of penalties, including criminal penalties, for pollution offences – was adopted, progress has been made by Eu countries in addressing illegal discharges in the marine environment. “However,” EMSA notes, “despite increased surveillance and enforcement efforts, illegal discharges of oil and other polluting substances still regularly occur in European waters, and the number of prosecutions remains low. Recognising this, EMSA has undertaken a number of activities together with the member states, such as workshops and trainings.” According to the agency, one activity identified by stakeholders as useful was the drafting of a document to provide a common overview of the enforcement chain from beginning to end. It was felt that a document developed at the European level would build upon and complement tools and publications already existing at a regional level. Now an EMSA working group has produced Addressing Illegal Discharges in the Marine Environment. EMSA says: “This publication is intended to support authorities involved in the enforcement chain addressing illegal pollution (eg surveillance operators, inspectors and investigators, Port State Control

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New forum on low-sulphur fuel

A new European Sustainable Shipping Forum (ESSF) is to assess developments towards compliance with the IMO 0.1% sulphur content in marine fuel regulations, which are due to come into force from 1 January 2015 in the sulphur emission control areas (SECAs). The secretary-general of the European Community Shipowners’ Associations (ECSA), Patrick Verhoeven, welcomes the establishment of the ESSF. He says: “Not only has the ECSA been actively involved in the preparatory work of the ESSF but we are also fully committed to contributing to and participating in the works of the forum and its four working groups. However, we do expect the work of the ESSF to produce concrete results that will help the industry to be compliant with the IMO 0.1% limit of sulphur content in marine fuel.” Set up by the European Commission (EC), the ESSF is intended to act as a dedicated expert group bringing together representatives of Eu states as well as private and public organisations to enable a structural dialogue, exchange of best practice and technical knowledge, cooperation and coordination between relevant public and private maritime industries, stakeholders and relevant EC services in areas jointly identified. It will consist of four working groups dealing with scrubbers, liquefied natural gas (LNG), innovation and financing respectively. The ESSF is expected to provide an opportunity to discuss practical issues that may be encountered during the implementation process, in particular during the transition phase before the new standards come into force. It will be able to discuss short-term measures and will furthermore take due account of regional specifics wherever necessary.

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Oily discharges warning

uk-based mutual liability insurer North P&I Club has warned its members of the importance of being ‘above suspicion’ when port authorities allege an oily water discharge. The club draws attention to the risk of multi-million-dollar penalties. In the latest issue of the club’s loss prevention newsletter Signals, the club’s head of loss prevention, Tony Baker, says: “Fines under the International Convention for the Prevention of Pollution from Ships (MARPOL) for bypassing a ship’s oily water separator systems continue to increase. This is particularly so in the uS, where the Act to Prevent Pollution from Ships (APPS) applies in parallel with the Clean Water Act.” According to North P&I Club, a ship operator was recently fined over $10 million for violations of APPS and obstruction of justice. Another operator and two engineers have just been convicted for conspiracy, failure to maintain an oil record book and falsification of records. Baker notes: “unfortunately, there can also be considerable consequential losses suffered by shipowners and crews who are falsely accused of illegal discharges. These include mental trauma for senior crew members, damage to the ship operator’s reputation, off-hire claims and crew costs during long detentions, and legal costs – which are irrecoverable in the uS, regardless of whether a case succeeds.” He says that ship operators and seafarers must take steps to ensure they do not get caught up in such situations in the first place. “This means ensuring their ships have the best equipment and procedures for handling and accounting for all oily water on board,” he says. The club recommends that oily water separators are reliable, well maintained, user friendly and tamper proof, so that crew members are not tempted to bypass them. The separators should be designated as ‘critical equipment’ within the ship’s safety management system and all oily water should be accounted for in the oil record book. Most importantly, crew members should be fully versed in the equipment, procedures and regulations as well as the importance of being co-operative during port state inspections. According to North P&I Club, a uS district court recently acquitted a shipowner of 16 felony charges for illegal discharge of bilge water by being able to demonstrate that the crew adhered to robust pollution prevention policies and procedures.

Environment

officers, law enforcement officials). It is recommended that readers familiarise themselves with the content of the document to obtain a sense of how the various steps in the enforcement chain are interdependent. However, the document has been developed so that each chapter can also be read in isolation, and readers can quickly identify the specific information they require.” EMSA says that enforcement actions in Europe have had limited results in terms of the number of cases prosecuted and of the level of sanctions applied. It notes: “Given the variety of legal systems and of operational practices in place in the member states, a vigorous and homogeneous enforcement of pollution regulations across waters under the jurisdiction of Eu member states will require considerable effort.”

Tony Baker

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Company news

gibraltar Port Powerhouse of the economy

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he Port of Gibraltar’s emergent reputation as one of the world’s leading maritime services hubs for international shipping in Western Europe is well deserved. Its strategic position right at the confluence of two of the world’s busiest sea lanes has enabled the Gibraltar Port Authority (GPA) to develop as a major bunkering port with reported sales of four million tonnes of bunkers in 2012 – a spectacular growth since 1990, when its annual total barely reached a million tonnes. “We have gone from strength to strength and everything indicates that this trend will continue in the years to come,” says captain of the port Roy Stanbrook. Although bunkering accounts for the lion’s share of port activity, the provision of highly specialised, professional and technical ancillary services to ship-owners has grown exponentially in the past decade. The GPA is both a hub and a hive of economic activity with numerous companies engaged in a diversity of trades contributing to port operations. Gibraltar’s commanding position at the entrance of the Mediterranean attracts around 10,000 port calls annually, representing no less than 14% of the estimated traffic of 70,000 vessels that travel the Strait of Gibraltar each year. The port carries out extensive provisioning for vessels, including dry docking, crewchanges, water, food, stores, paints and maintenance. A major plus for visiting ships is that they will be able to acquire what they need

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within hours of being in British Gibraltar Territorial Waters. The port is also taking advantage of cutting-edge 21st-century technology to provide instant information to business partners and stakeholders, with a recently launched mobile-optimised version of its popular website for smartphones. Port and maritime activity provides both direct and indirect employment for a substantial cross-section of the population. A powerful selling feature of Gibraltar Port, other than the availability of quality maritime services, is the country’s legal system, which mirrors that of England and acts as a focal point of interest for maritime firms. Gibraltar remains a favourite port for arrests, where the jurisdiction ensures expeditious and equitable treatment. “We do not accept any vessel just for the sake of accepting them; there is a vetting process in place and this constitutes a huge attraction for companies because they know they will receive excellent service in Gibraltar,” says Captain Stanbrook. Bunkering

Gibraltar's stature as a leading refuelling port for the international shipping community, with its main undertaking, bunkering, representing 85-90% of total activity, has been cemented on the highest operational and environmental safety standards. The port’s membership of the Green Award Scheme highlights this commitment, and all types of visiting vessels that hold this certification, not just oil and chemical tankers, are afforded a

5% discount on tonnage dues plus other financial incentives. The GPA has established stringent legislative and regulatory standards and procedures for the supervision of bunkering operations, including the inspection of vessels by one of two bunkering superintendents, who carry out necessary checks of ships prior to ship-to-ship (STS) transfers of cargo. The port also operates a regime of spot checks on bunkering operations to ensure a consistent quality of operation. The Port Authority operates a wellpracticed and mature response capability to react to the unlikely event of an oil spill. The levels of response are in line with those required by relevant domestic and international legislation. Additionally, cover for a larger spill is afforded by a contractual agreement with an internationally recognised oil spill response organisation. Although the Port of Gibraltar has appropriate resources, bunker companies are also required to have their own counter-oil pollution capability on board their vessels and ashore. “Our personnel and the companies working in the port are well trained and competent, carrying out regular oil-spill response exercises to make sure they are capable and aware of what they have to do and what we would need from them in the case of an incident,” says Captain Stanbrook. There is also close coordination, and regular meetings are held with essential and emergency services for the purpose of contingency planning.

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Ship repairs

Gibraltar also provides facilities for ship repair, ranging from the shipyard at Gibdock to the impressive range of mobile facilities available to carry out a broad spectrum of services, including anchor replacement and bottom scrubbing. Cruise industry

In simple terms, Gibraltar is a safe, robustly regulated and environmentally friendly port, where ships stop to refuel and obtain other maritime services. In an innovative move announced by the minister for the port, Neil Costa MP, the GPA now only offers STS operations within British Gibraltar waters and has abolished activities associated with Gibraltar outside the jurisdiction. This is designed to completely clamp down on would-be polluters and considerably strengthen environmental legislation. The port has allocated a priority anchorage for this purpose and the plan has resulted in a healthy demand from the market. When the move was originally introduced, it was feared there would be a drop in trade, but the outcome has been positive, generating even more income,

with between three to four STS operations carried out on a weekly basis. These operations in a controlled environment within territorial waters rather than in unregulated waters are stringently inspected and regulated to ensure compliance with local and international guidelines and regulations. Crew changes

Crew changes are another important aspect of the port’s service, facilitated by the proximity of the airport. The Gibraltar government supports this by allowing an immigration regime for a number of nationalities where difficulties would be encountered elsewhere in Europe. This is very convenient for ship owners and operating companies, who can easily fly or ferry crews into Gibraltar, while a

The cruise industry is one of the most important pillars, not just of the port but of the wider tourist industry and Gibraltar’s economy. It represents a major income stream, as the Rock operates an extended ‘cruise season’ for over 10 months in a calendar year. It has developed into a stable service in terms of port activity and last year accounted for 172 cruise calls. Ships scheduled for 2013 number 186, with passengers expected to exceed 294,000, up from the 290,000 registered in 2012. At any given time, Gibraltar can move anything between 4,000-8,000 passengers daily, depending on the number of ships in port.

Company news

vessel is on its way to move on to the next destination. This provides a convenient arrangement and an extra service that neighbouring ports subject to other visa requirements are not in a position to offer.

Vessel traffic services

The Port of Gibraltar provides an internationally recognised vessel traffic service (VTS), monitoring vessels approaching Gibraltar, managing the arrivals and departures of visiting ships and providing advice on traffic movements within congested port waters. ⏏

gibraltar Port Authority North Mole PO Box 1179 gibraltar gX 111AA E-mail: gpaenquiries@port.gov.gi tel: +35 (0) 200 46254 Fax: +35 (0) 200 51513 Website: www.gibraltarport.com

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Blending

Art and science Ara Barsamian, from the Refinery Automation Institute, explains how careful blendstock selection can save significant sums

T

he world’s economic downturn, rising costs across the board, lower freight rates and more stringent environmental specifications all put additional pressure on companies trying to make a profit, trying to stay in business. So how can they do that? using a smart selection of bunker blendstocks for blending and clever trading is part of the answer. Selection of bunker blend components

Bunker blend components are selected on the basis of properties that will permit companies to meet specifications at maximum profit and the delivered purchase price. This sounds easier than it actually is, because we need to look at a minimum of 13 vital specifications, and their interaction with the other blend components we have to hand. The first step is to have a complete lab test of the blend component, including stability, compatibility and ignition quality. The second step is using a blending tool to determine blendability and profitability. Can we make an on-spec product with the fuel and other blend components we have? Profitability, of course, is key: can we make a profit using the component in the blend? This

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WB Book Winter 2013.indb 30

also provides an indication of the room we have in negotiating the final price. The third step is to examine the energy content versus price. What is the price of net specific energy – $/ megajoule (MJ)/kg? Armed with this information, you should not be afraid to use any components available as long as they are not specifically forbidden in ISO8217 – for instance, biodiesel. typical bunker blending components

The types of blend components available depend on whether you are a refiner, a trader or an independent blender/bunker supplier. Refiners produce bunker blending components based on the configuration of the refinery and the type of crude oils running (light and sweet, light and sour, medium sour etc.). The sulphur in crude oil gets concentrated by a factor of about two in the residues (see Fig 1). The “heart” of bunkers are residues diluted with gas oils. Thus the type of bunker (high sulphur or low sulphur) a refiner can make economically is dependent on the type of crude used. Typical refiners produce straight-run and cracked components. Straight-run components include: atmospheric residue, vacuum residue and gas oils from atmospheric and vacuum distillation units.

Cracked components include visbreaker residue (only about 30 per cent of refineries have these units), gas oils from a variety of cracking units – hydrocracker, fluidised catalytic cracker (FCC), visbreaker, coker. These components include FCC cycle oils (light cycle oil – LCO or heavy cycle oil – HCO) and FCC Slurry (also known as clarified oil, decanted oil or carbon black feedstock) and petrochemical fractions such as steamcracker bottoms. Cracked components are generally cheaper. Atmospheric or vacuum residues have a higher added value, because they have more processing options to make desirable fuels such as auto diesel. However, they suffer from potential compatibility, stability and ignition quality issues, hence the need for lab testing before buying. trader and independent blender/ supplier components

In contrast to refiners constrained by their configuration and crude slate, traders and suppliers generally rely on purchase of semi-finished products, off-spec bunkers and odds and ends available on the market to make a finished product that meets the agreedupon specification. The bunker blend component slate is much larger than a refiner’s, and variable, since it depends on time-depend-

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practical and economical ship conversion feasibility questions. If these issues are resolved, it may be available in the next 10 to 15 years. The land-based scrubbers are well established in power plants. Installing and maintaining them on marine vessels is altogether a different issue. They are expensive to buy – about $5 million – and to install and maintain. Although feasible, they have been slow to be used because they don’t provide a cheap and reliable “drop-in” solution. how do we make LSFO?

Low-sulphur fuel oil (LSFO): sourcing and blending

As we all know, we are facing a number of International Maritime Organization (IMO) low-sulphur specifications that are going to increase costs on both sides of the aisle, both for suppliers and for the buyers. The LSFO refers to fuels with a sulphur content of 1% (required in emission control areas – ECAs – now), 0.5% (globally in 2020), and 0.1% (at the berth now in the Eu and North America and generally in ECAs in 2015), as shown in Fig 3. Based on current price differentials, the annual increase in fuel costs is huge, and threatens the viability of the shipping business (see Fig 4). There is no magic solution to making LSFO at affordable prices. There are three ways of complying with lowsulphur requirements. They are all relatively expensive. Owners can: use lowsulphur crude residues, desulphurise residue with very expensive residue desulphurisation processes, or switch to marine gas oil (MGO), which can be readily desulphurised using current technology that also makes 10 parts per million (ppm) auto gas oil. There are other potential alternatives: using LNG as fuel – this is a long way off (10 to 15 years in the future), onboard scrubbers, use low-sulphur crudes directly instead of marine bunkers. If crude oil is used, the properties must be similar, but not identical, to ISO8217. Owners should check with engine manufacturers. For the moment, I am discounting LNG replacing bunkers, because it still has enormous safety, availability and

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1% sulphur bunker fuels can be made from residues from low sulphur “sweet” crudes, which are 10 per cent to 30 per cent more expensive than “sour” crudes, blended with various cutter stocks. The availability of the sweet crudes and refineries designed to process them are limited, so the price will go up somewhat when compared with the 3.5%S bunker fuel. 0.5% sulphur bunker fuels can be made from a limited number of more expensive very-low-sulphur crudes, diluted further by blending with more expensive low-sulphur (0.1%S) marine gas oils, home heating oil, auto gas oil, etc. This increases the cost further when compared with 1% sulphur fuel. 0.1%S bunker fuels cannot be made economically because they require capital-intensive residue desulphurisation ($300 million – $500 million per unit). There are only about five crudes out of thousands that can produce 0.1%S residue, available in Indonesia and East Africa, but in negligible amounts. Essentially, 0.1% sulphur marine fuel is 100% marine gas oil. Sources of low-sulphur crudes and residues

Most of the sweet crudes suitable for producing low-sulphur residues in the 0.5% to 1%S range are available in relatively limited quantities, because they have to have suitable properties. They need to be not just low sulphur but also have adequate residue yield (the light sweet crudes from shales usually have very low residue yields but excellent gasoline and diesel yields), adequate pour, flash, metal content, low wax content and stability.

This limits the number of suitable crudes to those from the North Sea, Africa (Algeria, Nigeria, Libya) and Asia (Indonesia, Malaysia, Russia) – see Fig 5. The sources of low-sulphur residue are the refiners that process these lowsulphur crudes (circled in red), typically in the Eu and the uS, which are also early adopters of stringent sulphur specifications, such as for the ECAs and 10ppm sulphur automotive fuels. up to a point, we can blend down (dilute) the high sulphur content of current bunkers. Recalling that we have 16 specifications in ISO8217-2012 that we have to meet simultaneously, it is not a simple matter to just dilute sulphur without affecting other properties, like density, viscosity, metals and stability. To do it right (at lowest cost while meeting all specs), you need to use a blending tool that allows you to predict the properties of the resulting blend. Even better, if you use a blend optimiser, it automatically selects the right combination of components to meet the specifications at the lowest cost. To maximise profitability, one needs to use tools that clearly show the impact of buying/selling a particular blendstock on costs and profit and, at the same time, are easy to use by the average non-technical person. Such a tool is a blending optimiser (optimisation means maximising profit). A schematic is shown in Fig 6. The results are immediate and easy to understand (see Fig 6 and 7).

Blending

ent availability of opportunities (distress sales, arbitrage etc). For example, it might include: off-spec bunkers (high in sulphur, high in viscosity, high in metals, density, etc), slurries (low-sulphur, high aluminium-silicon – Al+Si), off-spec gas oils, low-sulphur crudes (0.1%-0.5%S) cracker bottom solvents. Because of the variety of blending components and random sourcing, it is imperative that the prospective component is analysed before buying it, lest you get incompatible and unstable fuels (see Fig 2).

the future?

Smart bunker blendstock selection improves the economic viability of marine bunkers, irrespective of whether we make or buy 3.5%, 1% or 0.5% sulphur bunkers. We need to keep in mind that 0.1% sulphur bunkers are impossible to make without very expensive (in the region of $200 to $300/tonne premia) residue desulphurisation. This will not happen. It is cheaper to switch to 0.1% sulphur gas oil or use scrubbers. LNG is wishful thinking for 2015. While only just arriving on the scene, scrubbers are here to stay, and permit use of high-sulphur intermediate fuel oil (IFO) or crude oil while meeting the 0.1% sulphur exhaust specifications

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Blending

Blending figures

Fig 1 – Typical Crude Residue and Sulphur Content

Bunker and Blend Component Qualities

Property

Density, kg/CuM

ATM SR Resid

Residue VAC SR Resid

VBKR Resid

IFO 380 Bunkers

RMG 380 I RMG 380 II

RMG 650 III

RMG IV 280

HSFO

Source: Valero

VBKR HGO

LSFO

Cutters and Diluents LCO

SLURRY USGC

CLO

Sohar Slurry

RUSSIAN M100

KERO

Marine GO

Misc Blend Components

Marine Diesel

HvyAro

Cracker Bott

Solvent G1

954

1078

851.5

Cinta

HCN

938

989

1005

991

975

981

960

981

958

854

938

1090

1027

1050

950

803

840

868

0.570

0.813

3.900

4.100

1.960

2.450

3.000

2.450

0.29

2.000

0.040

0.330

2.740

3.200

1.00

0.230

0.800

1.800

0.0005

0.50

2.15

0.080

Flash Pt, deg C

158

172

110

73

67

70

105

70

70

52

74

70

86.1

60

65

62

61

70

65

75

76

59.4

70

Pour Pt, deg C

36

48

45

-1

3

30

-15

30

-3

-40

-36

3

6

12

21

-45

-7

-14

-30

-30

-20

39

-30

Vis at 50 deg C

237

42774 0.005

8650

316

377

650

270

650

24.7

2.7

1.8

80

433

340

100

1.43

3

1.1

1.24

15

26

1.8

0.005

0.044

0.1

0.0125

Sulfur, Wt Pct

Ash, Wt Pct Con Carbon, Wt Pct Water & sediment, Vol Pct Total Sediment Potential, Wt % Vanadium, ppm W Aluminum+Silicon, ppm W

0.005

0.0125

0.025

21.8

0.03

0.01

0.08

0.055

0.076

0.10

0.01

0.02

0.01

0.01

12.00

0.01

0.008

0.01

14.9

25

17.5

17.2

0.02

0.005

0.02

0.6

0.002

0.001

0.022

13.7

7.67

10.0

0.002

0.01

0.002

0.001

0.050

0.030

5.85

0.001

0.000

0.000

0.050

0.100

0.400

0.050

0.400

0.060

0.100

0.000

0.000

0.15

0.65

1.00

0.000

0.000

0.010

0.000

0.000

0.000

0.010

0.000

0

0

0.03

0.02

0.02

0.0094

0.03

0.0094

208

0

0

0

0.08

0.05

0.1

0

0

0

0

0.05

0

0

0.04

13.6

23.4

0

155

28

0.09

0

0.09

96

0

0

0

79

61

70

0

0

0.05

0

0

0.02

2

94

700

0.00

0.00

0.00

24.00

6.00

22.00

0.00

22.00

3

0.00

0.00

90.00

158

0.000

0.000

0.000

0.000

0.000

0.000

0.000

2

0.000

0.000

0.000

3.000

ULO-Phosphorus, ppm W

0.000

0.000

0.000

0.000

0.000

0.000

0.000

0.000

56

0.000

0.000

0.000

1.000

Net Sp Energy, MJ/kg Acid Number Sodium, ppm

80

0.00

0.00

0.00

0.00

0.00

0

0.00

22.00

0.000

0.000

0.000

0.000

0.000

0.000

0.000

0.000

0.000

0.000

0.000

0.000

0.000

0.000

0.000

0.000

0.000

0.000

0

0

0

4

0

0

0

0

0

0

0

0

15

39

0

0

0

0

0

0

0

0

0

33

33

33

30

30

30

30

30

30

33

30

30

30

30

30

30

30

30

30

30

30

38

30

0

0

0

39.85

40.7

40.37

32.45

0

0

0

0

40.95

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

0

CCAI

850

850

-39

854

837

837

825

-16

857

100

105

-4

887

910

827

BMCI

78.62

78.62

-331.87

76.26

68.19

70.13

61.65

-338.84

69.86

-317.24 -317.36

-346.74

92.93

89.20

2.38

2.38

-10.06

2.05

-11.29

2.33

-11.56

3.10

2.97

Stability K=BMCI/TE

0.70

5.5

0.000

ULO-Calcium, ppm W

2.9886

923

0.000

ULO-Zinc, ppm W

TE

858

-9.61

-10.58

0

0

0

42.9

0

0.32

0

0

0

0

98

137

943

986

804

756

895

59.52 -303.95 -317.45

-304.02

104.94

132.70

37.18

20.29

81.63

-10.13

3.50

4.42

1.24

0.53

2.72

1.98

134 -10.13

-10.58

10

Fig 2 – Typical Bunker Blend Components and Finished Bunkers

Fig 3 – IMO Marine Fuel Sulphur Specifications

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Source: IMO

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Daily Fuel Consumption, t/d 300 100 40 35

Ship Type Post Panamax Container Ship VLCC Panamax Bulk Carrier Passenger Ferry Sample Prices: Houston, Feb. 1, 2013 IFO 380 3.5% S IFO 380 1% S MGO

USD/mt

Operation w 3.5%S $72,489,000 $24,163,000 $9,665,200 $8,457,050

Blending

Comparing Annual Fuel Cost for Ships

Costs/Yr % Increase Operation w 100% switch to 1%S MGO 3.5% to MGO $83,439,000 $116,179,500 60.3% $27,813,000 $38,726,500 60.3% $11,125,200 $15,490,600 60.3% $9,734,550 $13,554,275 60.3%

662 762 1061

Fig 4 – Prices and Differentials Between 3.5%S, 1%S and marine gas oil (MGO)

Fig 5 – Types of Crude Oils Suitable for Low-Sulphur Fuel Oil (LSFO) Blend Components

Objective Function Last Run at:

Blend Stock

Cracker Bottoms HCN MGO HSFO LSFO SLURRY USWC RUSSIAN M100 RMG 380 off-spec RMG 380 LS RMG 650 III

29862.41

2 Limits Hit (***)

Feasible: Yes, OK

11/18/13 2:59 PM

Amount, Tons

Wt% in Blend % of Option

2,000. . . 10,000. 3,982.5 7,826.6 10,000. 10,000. . 10,000.

3.72 0.00 0.00 18.58 7.40 14.55 18.58 18.58 0.00 18.58

0.0 0.0 0.0 100.0 39.8 78.3 100.0 100.0 100.0

Imputed Value

-368.60 -2764.68 -1666.85 640.82 114.03 82.29 203.82 1170.58 112.22 1468.17

% Min/Max Blend

Total Minimum Maximum

53,809.1 1,000 90,000

Imputed Value is the effective value of the component in the blend. It can be low because of poor quality or high cost. Slack values have imputed value=component cost.

Fig 6 – Schematic and Inputs/Outputs of Blend Optimiser

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Tons

59.3

Tons Tons

Cost. $/Ton Sales Price, $/Ton Profit, $/Ton Total Profit, $000

606.08 637.50 31.42 1,690.7

Blend Property

Density, kg/CuM Sulfur Content, wt% Flash Point, deg. C Pour Pt, deg C Vis at 50 deg C Ash, Wt Pct Con Carbon, Wt Pct Water & sediment, Vol Pct Total Sediment Potential, Wt % Vanadium, ppm W Aluminum+Silicon, ppm W ULO-Zinc, ppm W ULO-Phosphorus, ppm W ULO-Calcium, ppm W

Result at Optimum

986.2 1.94 72.3 10.4 200.0 0.068 10.1 0.33 0.038 95.4 60.0 1 4 3

Spec Range

<991 0><3.5 >60 <30 *** 200><380 <0.1 <18 <0.5 <0.10 <350 *** <60 <15 (Not Active) <15 (Not Active) <30 (Not Active)

Specific Energy , MJ/kg 40.00 >30 (Not Active) Acid Number, mg KOH/g 0.00 <2.5 (Not Active) Sodium, mg/kg 0.00 <100 (Not Active) Asphaltenes, Wt % 0.00 0<>10 (Not Active) H2S, mg/kg 0.0 0<>2 (Not Active) CCAI 856 >870 BMCI 76 <76 (Not Active) Stability K=BMCI/TE 16.3 >1.15 (Not Active) Note: *** shows a Limiting Specification

Fig 7 – Blend Profitability Check With Blend

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Company news

ISO 8217:2012 Marine Fuel Oil Specification Smoother, sweeter, safer

C

hanges to the marine fuel oil supply specification introduced in June 2010, with the fourth revision of the ISO 8217 specification, should make marine fuel oil both “smoother and sweeter” for its users. Smoother, because of the reduction in maximum limit for “abrasive” catalyst fines content from the current limit of 80mg/ kg to the lower maximum of 60mg/kg. And sweeter, since, for the first time, a specification limit for the “harmful and malodorous” hydrogen sulphide content is introduced at a maximum of 2mg/kg in the liquid phase. A fifth edition , released on 15 August 2012, referred to as ISO 8217:2012, has just a few changes from the ISO 8217:2010 standard. These relate to: • Pour point limits for dMX gas oil are removed from Table 1; • Change in the test method for Hydrogen Sulfide, updated to IP570-12A; • Clause 2 “Nominative references” no longer states the reference year for the test methods. This promised improvement in fuel quality has not fully materialised for most users yet, as take-up of the ISO 8127:2010 (and 2012) specification in the industry has been relatively slow. Only about 20% of deliveries in 2012 were made to the 2010 standard, with the majority still traded to the older ISO 8217:2005 standard. However, there does appear to be significant regional variation in uptake, with some areas embracing the standard and other areas more reluctant to do so. The slow uptake is perhaps understandable and results from a combination of both longterm contracts and cost concerns. However, the changes introduced in ISO 8217:2010 were made for sound technical, environmental and health and safety reasons and reluctance to adopt the new standard may prove, in the long run, to be a false economy. Without doubt, refiners have faced technical challenges in the production of marine fuel oils in recent years, with changes in both the quality of crude oils available to them and the need to produce fuel to improved quality specifications with lower environmental impact. Technically though, the changes in the ISO 8217:2012 specification discussed here – namely, reductions in both hydrogen sulphide and catalyst fines levels – are relatively easy to meet from any given initial fuel quality.

from heavy fuel oils and, in particular, bunker fuel. The problems arising are related to: • Safety – H2S is a noxious and toxic gas, which at high concentration can render a person unconscious within just a few breaths and cause death. The need to control H2S is increasingly recognised in industry and, in recent years, the exposure limit regulations have been further tightened. • Odour mitigation – local authorities are increasingly putting pressure on refiners and terminals to minimise fugitive emissions. • demurrage charges – if a cargo cannot be either loaded or discharged because of an H2S problem, traders handling the cargo can accrue significant demurrage charges of approximately $30,000 per day on a 30,000-tonne tanker. Monitoring and control of hydrogen sulphide

The prime risk posed by H2S relates to harmful gas levels that can develop in the vapour phase above tanks. In a specific physical environment, this is determined in the vapour phase using a variety of sensor or specific gas absorbent measurement techniques. While totally appropriate as an occupational health protection measure, this has its limitations. The head space gas distribution in a ship's tank head space may not be uniform in composition. Also the factors that determine the extent to which H2S will build up are difficult to assess in practice as they are dependent on the temperature, tank ullage space and the amount of fuel agitation. If, for example, a high level of H2S vapour in a tank was removed by venting, H2S present in the liquid phase would migrate from the liquid to the vapour phase, establishing a new equilibrium. Measurement of H2S in the vapour phase may therefore give a false sense of security with respect to this toxic gas. To get a better understanding of the H2S risk posed by a particular fuel, it is important to determine its concentration in the liquid phase. This gives a measure of the fuel's ultimate “potential” for the release of the gas into the vapour space. This is why a liquid phase H2S specification limit was adopted in the changes to the ISO 8217:2010 revision. A general guideline is that 1ppm of H2S dissolved

in the bulk fuel liquid phase can produce about 100ppm in the vapour phase. Consequently, by lowering H2S levels in the liquid phase, toxic gas exposure can be reduced if not totally eliminated. The method specified for the new 2mg/kg H2S limit is IP570, which utilises the SetaAnalytics H2S Analyser. This is a simple technique that allows for the rapid determination of H2S levels in fuel oils. The development of this method has been one of the key enabling factors for the revision of the ISO8217 standards. Additive application

Refiners who find that they cannot meet the new specification have several process treatment options. The selection of lower sulphur crudes or desulphurising fuel oil blend components may rarely be viable, although lowering vacuum tower bottoms temperatures or an increase in stripping steam are process optimisation steps that can prove effective. Chemical scavengers however offer a highly effective, economic and flexible option for the removal of H2S. While several chemical treatment options exist, selection of a suitable programme is essential if the application is not going to give rise to other issues. Chemical treatment options used in the past have included caustic, formaldehyde, simple amines and glyoxal; all of which can cause problems such as handling, corrosion, fouling or re-release of H2S under certain circumstances. Nalco Champion supplies a range of complex proprietary amines (triazines), such as Sulfa-Check™ EC5495A, containing patented reaction promoters. These are highly efficient scavenging agents that form stable, oil-soluble, irreversible reaction products that are free from both fouling or corrosion problems. The ideal application of scavengers to control H2S is prior to or during blending on the refinery, although remedial treatment of tanks and tanker cargos is also possible. Two of the most important factors in applying a H2S scavenger are to obtain good mixing and allow time for the product to fully react. Typically, a Nalco Champion technologist would survey a system prior to scavenger application to establish the optimum treatment programme.

reaction mechanism for triazinebased hydrogen sulphide scavengers

hYDrOgEN SuLPhIDE (h2S)

For many years, shippers and terminal operators have experienced occasional problems associated with the release of H2S 34

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Catalyst fines are hard and abrasive aluminium silicate, catalyst fragments and can range in size generally from about 1 to 75µm. FCC cycle and slurry oils, which invariably contain some catalyst fines, are increasingly being used as cost-effective fuel oil blend components added to meet viscosity specifications. In recent years, there has been a increase in engine damage claims that have been attributed to the presence of catalyst fines. Large, low-speed engines with large fuel injection components and where cylinder lube oil is minimally applied to liner surface seem particularly susceptible to damage from catalyst fines. A limitation on catalyst fines (Al+Si as determined by ISO 10478) was originally introduced in ISO 8217:1996 at a limit of 80mg/kg, which in ISO 8217:2010 was reduced to 60mg/kg. MAN, B&W, Wärtsilä and others specify a limit of 15ppm and, in theory, a ship's fuel treatment system should be capable of reducing catalyst fines down to this level. However, for a variety of reasons, they often don’t operate to this level of efficiency, leaving engines vulnerable to damage. This is a problem that is most effectively solved by treatment of the catalystcontaining fuel components before they are used in blending. Refiners use a variety of techniques to reduce the catalyst content of slurry oils. These include : Reactor cyclones – the reactor cyclones are the first step in the removal of catalyst fines. A properly operating system with twostage cyclones will remove particles larger than 15-20 microns in diameter. Mechanical problems with the cyclones, operating

changes to the FCCu, or the use of a softer catalyst will tend to increase catalyst losses to the slurry oil, as well as changing the slurry oil’s particle size distribution. The amount of catalyst fines in circulating slurry oil normally ranges between 0.2 wt% and 0.8 wt%. Further reductions in fines levels can be achieved by using one of the other methods described below. Electrostatic precipitators and mechanical filtration - some FCC units have mechanical or electrostatic separation devices installed to remove catalyst fines from slurry. Generally, the separated fines are back-washed using slurry or heavy cycle oil back to the riser. These devices when operating properly can be very effective in removing fines. They do, however, represent a significant capital investment and many refiners have reported having problems operating and maintaining. A further disadvantage is that the recycle stream back to the riser is usually high in difficult-to-crack aromatic compounds that will increase coke formation and product yield losses. Tank settling and settling aids – settling of the catalyst fines in tankage is the most common method used by refiners to achieve finished ash and Al and Si specifications. Normally, one or more settling tanks are devoted to this service. Several factors can affect the efficiency to which the catalyst fines will settle. Temperature is a key parameter; this affects the slurry oil viscosity and relative density difference between particle and oil. Tank design and placement of inlet and outlet nozzles will determine the degree of quiescence or disturbance in the tank. Whatever the situation, the rate of

settling will be dependent on the catalyst fragment particle size. Small size particles will settle very slowly or not at all in some circumstances. Settlement aid additives can significantly increase the rate of settling and degree of removal of catalyst fines from a slurry oil. These additives are speciality polymer compounds that operate by flocculating together the small catalyst fines into substantially larger agglomerations, which settle much more quickly under the force of gravity.

Nalco Champion has supplied catalyst fines settling aids to refineries for many years

Company news

CAtALYSt FINES rEDuCtION

Settling aids can improve fines removal by up to 90% over untreated systems. Even under mildly turbulent situations seen in heated tanks, settling aids improve catalyst fines separation and removal from slurry oil. Other than the requirement for a low-cost dosing pump, settling aid use requires no major capital investment and is a flexible and effective way of enhancing catalyst fines reduction. Relatively simple mechanical and chemical solutions are available to allow fuels to meet the new H2S and Al+Si standards, without adding unduly to cost. What is needed now is the will to act to address potentially harmful situations. Authors

Ron Sharpe; Tony O’Brien; Simon Crozier: Nalco Champion Energy Services, industry technical consultants.

Al +  Si  (ppm)

600 450 300 150

48 hrs

0 0

24 hrs 100 200 Se2ling  Aid  Dosage  (ppm)

Reduc&on of  Al  and  Si  Catalyst  Fines  in  Slurry  Oil    with  Se9ling  Aid World Bunkering Winter 2013

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Sulfa-Check, Ecolab, Nalco Champion and Nalco are trademarks of Ecolab USA Inc. 35

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3 The latest trends in the global fuel oil and HFSO market overview, with in-depth analysis of arbitrage economics, rates of flow and changing European dynamics 3 How changes in the refining industry globally are impacting the volumes and types of fuel available to ship operators, as well as operational repercussions 3 Outlook for the Mediterranean bunker and tanker markets: insights from key regional market players on Gibraltar, Turkey and Egypt 3 Environmental regulatory landscape and bunker specification changes in Emission Controlled Areas, the push towards lowering sulphur emissions and other fuel regulations 3 A critical examination of options available to operators considering alternative fuels, including the potential of Liquefied Natural Gas as a viable alternative to traditional bunker fuel

SPEAKER HIGHLIGHTS: Captain Peter Hall Chief Executive Officer

The International Bunker Industry Association (IBIA)

Trevor Harrison, Maritime Arbitrator and Mediator and Board Member

The International Bunker Industry Association (IBIA)

Dr. Leo Drollas Director and Chief Economist

The Centre for Global Energy Studies

Colin Birch Vice President, Downstream Energy Consulting

IHS

Donald Gregory Director

EGCSA (Exhaust Gas Clearing Systems Association) Supported by:

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WB Book Winter 2013.indb Mediterranean Bunker FP A436 GD.indd 1

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+44 (0)20 7176 8512 25/11/2013 25/09/2013 11:16 18:05


Additives

Cure-all or snake oil? Additives may have a mixed reputation, but some are undoubtedly effective in addressing specific problems.

A

dditives have been offered to owners as a means of improving the performance of fuel oil or remedying some defect in the fuel for many years, notes marine engineer and bunkers expert Nigel draffin. He points out to World Bunkering that the earliest additives appeared in the 1930s. He explains that many additives have been regarded with great suspicion by ships engineers for a couple of reasons. “The majority of additives,” he says, “were described as capable of correcting any defect and improving all fuels when, in fact, each additive was probably only effective with one specific problem. Secondly, the additives were not cheap, their effect was almost impossible to verify and the cost came out of the ship’s stores and spares budget.” The first target for additives was ash. The so-called ash-modifying effects of some additives are beneficial in altering ash melting temperatures and reducing high temperature corrosion and exhaust-side fouling. The second use was de-emulsifying. de-emulsifiers assist in water removal and reduce the amount of sludge developed in the fuel treatment plant. The third group targeted pour point and a relatively small volume of additive can make a significant reduction in pour point. But, according to draffin, “It

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is seldom cost-effective with fuel oil.” He cautions: “Beware of an additive that claims to solve all problems. Some claim to improve fuel stability, to improve combustion, to “counter the effects of high asphaltenes” – in some cases, it is difficult to define the problem that the additive seeks to cure. Moreover, the performance claims are often based on quite limited trials.” Nevertheless, draffin says that some additives have proved very successful and are used on shore and at sea. He advises that “talking to other users can be instructive”. The ‘combustion improvers’ are being challenged by the ‘self-tuning’ ability of the most modern electronically controlled engines. Benefits can be seen on older engine types, but are not so easily identified on the most modern engines. According to draffin, three groups of additives have been shown to prove effective, but he has seen no serious study of their economic impact.

The main culprit is vanadium and sodium combinations and mediumspeed engines are those at greatest risk, because their exhaust temperatures are much higher than slow-speed engines (550°C, compared with 450°C). De-emulsifiers

If a fuel has water in an emulsion, the separators will not be able to remove the water. de-emulsifiers will chemically separate the water from the fuel.

Ash modifiers

This group of additives aim to change the melting point of the ash to reduce or eliminate a tendency to deposit molten ash condensate on the exhaust components of the engine. The condensate causes ‘hot corrosion’, countered these days by the use of Nimonic alloys in the components.

Nigel Draffin

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Additives

Interestingly, a number of companies are at advanced stages in developing emulsions as fuels. Presumably, if these initiatives are successful, this type of additive will be less in demand. Pour point improvers

These additives will reduce the pour point of the fuel. It is routinely used in product trading, especially with distillate fuels. However, draffin says: “This is not usually an economic solution with residual fuel oil.” Additive manufacturers certainly seem sure that there is a continuing and growing need for their products, partly as a result of stricter regulation. For example, Innospec says on its website: “Environmental legislation is putting pressure on ship owners, managers and operators to reduce emissions and move to much lower-sulphur fuels – whether this is the traditional residual heavy fuel oil or marine distillate. New legislation from the International Maritime Organization (IMO) on emission control areas (ECAs) is changing the fuels used by the shipping industry. The drive to introduce marine fuels

with increasingly lower sulphur content – both heavy fuel oil (HFO) and distillate grades – is presenting a challenge for ship owners and marine engineers.” Confidently, Innospec, which says it is the world’s largest supplier of heavy fuel oil additives, marine fuel additives and marine diesel treatments, claims it has answers for shipowners whether they are staying with HFO or changing to marine diesel fuels. “We understand these challenges facing the industry and can provide you with the next generation of fuel additives.” In a similar vein, Lubrizol also offers answers to the “challenges created by changing emission regulations and ultra-low-sulphur diesel fuel standards”. Lubrizol says that the questionable reputation of additives in the shipping industry has resulted from the actions of a few unscrupulous suppliers. It says high-quality fuel additives can make a difference in terms of lower operating costs and reduced emissions. In 2010, Lubrizol conducted a sixmonth field trial with test vessels on the Mississippi River. It says the results indicated that the addition of a multi-

functional diesel fuel additive reduced emissions. The tests also showed a statistically significant average fuel efficiency improvement of 2.33 per cent. The manufacturer also says that additives can help when fuel switching – from residual to distillate fuel – as a ship nears an ECA. It says that the right additive can stabilise the fuel, making the change over from residual to distillate less problematic. Lubrizol also makes the following general comment: “It is always wise to be sceptical of unsubstantiated claims in the marine industry or anywhere else. Shipowners and operators should always ask to see proof of performance, which a legitimate additive supplier will be pleased to provide.” So how useful are additives? They are certainly not snake oil, but they do need to be selected carefully to address specific issues. More independent trials could increase confidence in their use among ships’ engineers. In any case, it would seem that additives will continue to be used by a significant, and possibly increasing, number of companies.

USA: +1 713 407 3695 ASIA: +65 6322 8215 UK: +44 1325 390180 E-MAIL: marine.services@intertek.com WEB: www.intertek.com/marine

Profitable voyages depend upon bunker fuel quality. Staying in business means staying on schedule. Poor-quality bunker fuel represents one of the biggest threats to keeping your schedule and profitability intact.

38

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Intertek ShipCare provides fast, accurate testing for bunker fuel quality, helping avoid costly repairs and downtime.

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Testing

IK buys DNVPS dNV spins off its fuel testing subsidiary in the wake of the dNV GL merger

T

he Norwegian det Norske Veritas (dNV) foundation has announced that funds managed by Ik Investment Partners are to acquire its fuel management services subsidiary dNV Petroleum Services (dNVPS). The move has come shortly after the merger of classifications societies dNV and Germanischer Lloyd (GL). Financial details were not disclosed. Henrik O Madsen, president and CEO at dNV GL Group, said: “The sale is a strategic decision, based on a review of the dNV Foundation’s total portfolio of activities following the dNV GL merger. dNVPS was not part of the merger process and has remained with the dNV Foundation. We believe the new ownership will provide dNVPS with a stronger platform and better focus for delivering on its strategic ambitions.” Founded by the Norwegian foundation dNV in 1981, dNVPS operates mainly within two segments, fuel quality testing and bunker quantity surveys, having pioneered their development and introduced them in 1981 and 1987 respectively. dNVPS is currently the market leader within fuel quality testing, with approximately half of the global contracted volume. dNVPS has experienced strong growth since inception, and has revenues of $50 million a year and a business model resilient to cyclical freight rates.

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Headquartered in Singapore, the company employs 220 staff and has offices in Rotterdam, Houston, Fujairah and Oslo, with four strategically located ISO17025 accredited and specialised laboratories, supported by sales and customer support in 150 key shipping clusters. Madsen added: “dNVPS has been an exciting business since it was established by dNV back in 1981, and it has been consistently growing. during the past 20 years, it has delivered strong financial results. We believe Ik will develop the company further and move it to its next level of growth. “At the same time, dNV GL will continue its partnership with dNVPS to provide expert services to new and existing clients around the world.” Eirik Andreassen, who will remain as managing director of dNVPS, said: “This is a defining moment for dNVPS, as we are poised for growth with Ik. Opportunities will come from sharpening our focus on our clients’ needs, building on our global leadership position, expanding our high-quality service offerings and R&d capabilities and leveraging our fuel quality testing database to create value and develop innovative services and products. We are also pleased to maintain close ties and collaborate with dNV so that clients can benefit from our enhanced capabilities.” Thomas klitbo, deputy director at Ik, said: “dNVPS is an innovative and

well established company in a specialised niche market. The company will benefit from increased global fleet size and increased demand for its services, which will allow it to maximise volume growth. We are looking forward to working with the management team on this project.

Eirik Andreassen

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Testing HRH Crown Prince Frederik of Denmark

Complex monitoring

New testing centre

Martek supplies a sophisticated FSRu emissions monitoring system and expects more testing contracts as ECA regulations bite

Alfa Laval’s groundbreaking Test & Training Centre, housed in a former danish shipyard, is due to open in January

M

artek Marine has delivered the most sophisticated emissions monitoring system ever built for marine use to daewoo for the world’s largest floating storage and regasification unit (FSRu). The 173,400m3 vessel, which can also function as a liquefied natural gas (LNG) carrier, is due for delivery in May 2014, when it will be deployed in Brazil. Martek says that the system is so complex that no other company was even willing to quote for the project. In a statement, it says its expertise in emissions monitoring is what enabled it to build and deliver such a complex system. The equipment monitors nitrogen oxide (NOx), sulphur oxide (SOx), carbon dioxide (CO2), carbon (CO) and methane (CH4); total hydrocarbons; non-methane hydrocarbons; benzene; nitrous oxide (N2O) and particulates. According to Martek, it is unique for a system to measure so many different emissions, and benzene and N2O are only monitored very rarely. Martek has used specialist analysis techniques to measure benzene at levels below 1 part per million. Steve Austwick, Martek’s emissions monitoring expert and project manager, says: “This is the biggest and most complex system ever built in the marine industry. The fact that no other supplier was prepared to take on this project underpins our position as the market leader.” Martek expects to build more complex monitoring systems as the European union pushes for emissions monitoring legislation for the maritime industry. Another factor will be emissions control areas (ECAs) coming into force and, later, tightening their requirements.

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O

riginally conceived for the development of PureSOx and other emission control technologies, Alfa Laval Test & Training Centre has grown to incorporate far more than just exhaust systems. To as great an extent as possible, the facility is designed to mimic the operation of a commercial vessel. For this reason, the equipment is not installed as isolated components but rather as an integrated system complete with heat exchangers and other auxiliaries. The majority of the equipment is in place in readiness for a January start. Located on the site of the former Aalborg Shipyard in denmark, the new Alfa Laval Test & Training Centre is an imposing structure. The massive ship simulation facility has a testing area of 250m2, where pride of place is given to a new generation of PureSOx, currently under development. Added to this are a dedicated control room and a training complex for visitors, the first of whom were Crown Prince Frederik of denmark and the danish minister for the environment, who toured the site in September. “We’ve said that the Alfa Laval Test & Training Centre will be the closest thing on land to the machinery room of a full-sized commercial vessel, and the truth of that becomes clear as the facility nears completion,” says Lars Skytte Jørgensen, vice-president of Alfa Laval Product Centre Boilers, which is responsible for the facility. “Nowhere else in the world will you find this range of marine equipment in a full-scale, real-life operating context – except on a vessel at sea.”

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Risk management

Hedging your bets Controlling cost through hedging techniques is high on the risk management agenda

W

ith the rising cost of bunker fuel, stagnant freight rates, oil price volatility and political tensions, risk management is ever more important in the bunker industry. Coupled to this, a greater degree of due diligence over counter parties is essential at a time when bunker suppliers may have to act more in the role of a bank extending credit to its customers. Given the importance of fuel as an element of costs, potential investors in the shipping industry will be looking to see how that cost is being controlled – a difficult question for a CEO to answer. Shipping companies need to realise that they are existing in an ecosystem with key suppliers, be it fuel or terminals, and suppliers are funding the business, according to Alok Sharma, head of marine at Inatech. In 10 years, the cost of fuel has risen sixfold. Prices are historically high and, depending on where the ship is going, the price can vary. Inatech did a study of a number of transactions to see which factors influenced procurement for shipping companies. The top three were planning, negotiation and timing. The average transaction, Sharma says, is made about six days before the ship reaches the port, and moving that back even one day could influence the price by 10%. Only once the

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commercial trade has been fixed will the bunker supplier be approached for the fuel. Time pressure may mean that, as a result, the fuel is sold at a higher price than if better planning had been involved. With more forward planning, the shipping company should be able to get in contract with the supplier sooner. “Bunkering is still considered an operational function, so something that needs to be done for the ship to complete the commercial voyage. This was great when ships were making money and fuel was cheap, but now ships are not making money and 60 per cent of the freight is going towards paying the fuel bill.” According to a new survey by accountant Moore Stephens, vessel operating costs are expected to rise by more than 3 per cent in both 2013 and 2014 . The cost of fuel occupied the thoughts of a number of respondents, one of whom noted: “Fuel costs remain the biggest chunk of our operating expenses owing to surging price increases.”

Referring to political volatility in the Middle East and increasing regulation on sulphur emissions levels, another respondent predicted that many owners would “have to switch to marine gas oil (MGO), which will involve a very big cost increase. We have already seen how the switch between high and low-sulphur fuel is causing problems for

Richard Greiner

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away price uncertainty, and hedging is not a form of speculation, she added. doing nothing, she told delegates, equated to speculating on bunker costs. While bunker prices hurt business, it was difficult to pass these increases onto consumers, she said. A number of different hedging tools were available, including fixed forward pricing, where prices could be fixed in advance for specific ports for both single or multiple liftings, without it being necessary to specify a particular vessel or ETA. Other options included multiple prices agreements (MPAs), where it was possible to protect against rising prices while taking advance of falling ones. An MPA “works like an insurance policy for a physical supply contract”, she said. Insurance premiums were paid up front, giving the right to buy at a pre-agreed price. This, she explained, was “ideal to fit bunker purchases to a budget” while still being able to take advantage of the downside. Swaps were another option, involving fixing the price on an official fuel index with a financial settlement. Bunker supplier OW Bunker believes that ship owners and operators could look to take advantage of the current low spot prices for Rotterdam fuel oil barges (FOB) 3.5% by implementing hedging instruments as part of a risk management solution to lock in fuel oil costs for 2014. Since 1 July 2013, the average cost for Rotterdam FOB 3.5% has been $590.71 per tonne, based on a high of $613.50 per tonne on 2 August 2013, and the recent low of $561.75 per tonne recorded on 7 November 2013. In line with this, many large ship owners and operators have set their budgets for fuel oil for 2014 based on the average price. However, the current low means that prices can now be hedged for 2014 at Rotterdam FOB 3.5% of $570.00 per tonne. Given the shape of the current market, it is clear that there are significant hedging opportunities, and now is the time to implement effective risk management solutions that lock in costs and maximise levels of profitability for customers going into 2014,”says Brian Thorhauge, OW Bunker’s global head of risk management.

OW Bunker also believes that ship owners and operators should look to utilise a combination of hedging instruments within a risk management solution to best mitigate risk. This is based on a level of uncertainty in future oil prices, owing to a combination of factors. This includes the impact of the uS shale oil reserves, which could lower prices, balanced against the continued upturn and improvement in confidence within the global economy, which may see an increase in demand that will drive oil prices upwards. Geopolitical risks, specifically unrest in the Middle East and North Africa, will also have an impact. Thorhauge says that: “Owing to the level of uncertainty of future oil prices, we are starting to see more complexity within risk management solutions that move beyond plain swaps, which just fix the price of fuel oil for a specific period. We are now seeing customers implementing multiple hedging instruments, such as combining paper and physical fixed prices. As well as purchasing a forward swap to protect against rising fuel prices, customers can also buy a forward fixed price physical. This means that they don’t have to worry about their paper positions and also have the assurance of supply when and where they want it, at an agreed price, which can be adjusted accordingly, based on the differential at the particular port where the product is lifted. “Customers can also consider options as a hedging instrument, designed to help them determine their maximum fuel price, while benefiting from partial decreases in prices. ultimately, it is about providing tailor-made solutions at competitive prices specific to the customer’s business and operations that maximise their profit in line with their appetite for risk,””he adds. Political risks were touched upon at the IBIA conference by Alex kaderbhai, senior manager, risk analysis, at Stirling Assynt Asia. These could involve risks arising from decentralisation and conflicts between local and national rules, physical violence and unrest or corruption He also raised concerns about legislation such as the Bribery Act in the uk, which caused business problems by reducing the use of intermediaries.

Risk management

some ships, and instances of black-outs and loss of power are on the increase.” Moore Stephens’ shipping partner, Richard Greiner, says: “Ship operating costs fell by an average of 1.8 per cent across all the main ship types in 2012, so, at first blush, the predicted increase in costs for this year and next might come as something of a disappointment. In truth, however, the levels of increase anticipated for 2013 and 2014 are still way below many of those we have seen in recent years. Moreover, they have to be viewed against a number of serious challenges facing the owners and operators of vessels in today’s shipping industry. “Crew costs, as always, emerged as a major concern for respondents, which is no surprise given the potential budgetary implications of the entry into force of the Maritime Labour Convention 2006 and the increasing involvement of both international and regional bodies in the oversight of crew competence and its effect on safety. Continuing the theme of previous surveys, fuel costs again featured prominently as a cause for concern, as did the cost of having to comply with increased regulation generally in the shipping industry. The latter, unfortunately, cannot be addressed by the expedient of applying new rules and regulations only to new ships, as suggested by one respondent. The regulators want a clean and safe shipping industry, and it is the industry itself, which includes a significant number of older vessels, that will have to underwrite the budget needed to achieve compliance. “The projected increases in vessel operating costs for the next two years will be difficult for owners, operators and managers to absorb. The good news, however, is that the global economic environment is showing continuing signs of recovery. The freight markets should feel the benefit of that, and that is what pays the bills.” As Christel McLoughlin, director of risk management at kPI Bridge Oil, pointed out at the International Bunker Industry Association’s (IBIA’s) annual conference in Hong kong, bunker costs represent between 50 per cent and 70 per cent of the daily running costs of an average vessel. Risk management takes

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North America

Going for gas LNG as fuel has become an increasingly attractive option in the uS and has received backing from the uS government, with a number of new initiatives planned

T

he dynamics of the North American energy markets are mainly influenced by the fact that, in the next few years, the uS will become an exporter of oil as opposed to one of the world’s largest consumers. And this doesn’t take into account the development of fracking and shale gas. With the high cost of traditional, diesel-based marine fuels, and the abundance of natural gas coupled with its environmental benefits, liquefied natural gas (LNG) is increasingly gaining traction as a source of fuel in the maritime industry, according to Federal

Federal Maritime Commissioner William Doyle

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Maritime Commissioner William doyle. He stressed this point at the Sino-American Logistic Conference, organised by the American Society of Transportation and Logistics, in October. There is an abundant supply of natural gas in America and it is being produced in substantial amounts from shale formations such as the Marcellus in Pennsylvania and West Virginia. Considering the economics, natural gas is a more cost-effective fuel source than marine residual and distillate fuels, doyle said in a speech to the visiting Chinese delegation. “In the united States, the Obama administration is embracing the concept of LNG as a marine fuel, and the maritime industry is in the process of developing, converting and constructing LNG-powered vessels. With all transportation modes, there needs to be an adequate supply of fuel sources by which these modes can fuel and refuel their assets.” According to doyle: “Based on the current forecasts, natural gas delivered for production of LNG in the uS is now at least 70% less expensive on an energy equivalent basis than marine residual fuel and 85% less expensive than marine distillate fuel. The Energy Information Administration (EIA) currently projects that this relative price advantage will continue, and even increase, through 2035. This has opened up an opportunity for significant annual fuel cost savings when converting marine vessels that use petro-

leum fuel to natural gas operation. About 70% of domestic shipping relies on distillate fuel oil and the remaining 30% relies on residual fuel oil. By contrast, over 90% of international shipping is fuelled by residual fuel oil.” Residual fuel also has significantly higher sulphur content than distillate fuel – 1% or more – and much higher heavy metal content, he added. The uS department of Transportation through the Maritime Administration (MARAd) is sponsoring a demonstration project involving an ocean-going container ship that will be re-powered to use LNG as fuel. MARAd is also funding research related to LNG fuel transfer, infrastructure and training. This research is expected to be completed in 2014. The commissioner also highlighted a number of recent contracts, including Ocean Tug & Barge Engineering Corp’s selection to design a new high-speed, LNG-fuelled, articulated tug and barge (ATB) container carrier for Minyan Marine. It will be the world’s first LNGpowered ATB. New Orleans-based Harvey Gulf International Marine is preparing to launch the first uS flag vessel, an offshore vessel, to be operated primarily on natural gas. The LNG dual-fuel Harvey Energy is to be rolled out very soon and is the first of at least six LNG-diesel dual fuel offshore supply vessels for Harvey Gulf. Harvey Gulf recently stated that it may order as many as 10 vessels. The World Bunkering Winter 2013

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such as long-haul trucking, rail, mining, marine, and oil and gas services. John Shepherd, managing director at GE Energy Financial Services, says: “Natural gas is revolutionising the fuelling of long-haul trucking and other high-horsepower applications. With massive amounts of domestic reserves, America is facing a generational opportunity to move to a more secure, less expensive and cleaner-burning fuel. Eagle LNG Partners’ mission is to provide customers with technology and know-how to confidently make the switch.” Eagle LNG Partners will identify strategic uS locations to develop, own and operate LNG production projects. Maine Maritime Academy meanwhile has been awarded a university Transportation Center grant from the uS department of Transportation (dOT) for $1.4m to develop a marine engine testing and emissions laboratory. The laboratory will focus on the research and development of emissions reduction technologies and engine efficiency enhancement technologies for marine and related power plants. METEL will concentrate efforts on a number of dOT strategic goals, including the advancement of environmentally sustainable policies and investments that reduce carbon and other harmful emissions from transportation sources. “Maine Maritime Academy’s engineering and transportation education programmes are addressing critical workforce needs,” says academy president William Brennan. “Our specialised programmes, combined with our fully capable working waterfront, make it possible for students to be involved in hands-on research on these new technologies, which have the potential for worldwide impact on the marine transportation sector.” Commenting on the challenges and opportunities facing the bunkering industry, kieran Michael Brown, global credit director at Atlantic Gulf Bunkering, says most current opportunities are tied to macro-economic trends. “For example, the ongoing recovery in the uS is driving more containership traffic to major container ports, and that’s an opportunity for expanded trading and supply. Another less clear development is the uS moving to being a net exporter of petroleum rather than a net

importer. On the one hand, this trend has decreased the need for lightering, but may provide opportunities down the road to supply vessels working increased petroleum exports.” The current challenges remain mostly unchanged since the crisis began, he says: ongoing defaults in the German and South korean shipping industries continue and have knock-on effects on vessel owners and traders; risk-to-margin ratios have become unrealistic; and freight rates across all major shipping segments lag behind the general global economic recovery. Bob Lintott, former chairman of the International Bunker Industry Association and head of Lintott Marine, says the uS West Coast is something of a challenge and is probably the more interesting area, given the emissions restrictions, fuel types and taxes in California. Given the vast differences between ports that offer bunkers, the rules and regulations vary considerably between them and “lumping them together often obscures this”. distances rather than differences might be a better word, he says. “To put it into perspective, New york to Miami is over a third of the distance between Liverpool and New york.” The Intracoastal Waterway (a dredged navigation canal that stretches from New Jersey, down the uS East Coast, around Florida and along the uS Gulf Coast to Brownsville, Texas) is about the same distance as Liverpool is from New york. In all that distance, the ports where bunkers are available from competing suppliers are limited to the New york/New Jersey/Philadelphia area, Baltimore and Norfolk on the uS East Coast (between Norfolk and Mobile, bunkers are available in Jacksonville, Charleston, Miami and Tampa, but there is no competition), Mobile, New Orleans, Houston/Galveston area and Corpus Christi – that’s over 3,000 miles with only six competitive ports. “Imagine that in Europe,” he says. “This is because there are very few commercial vessels that burn fuel oil and trade internationally under the American flag. Almost all American commercial shipping burns marine gas oil. Thus, bunker facilities are here for visiting foreign ships rather than for American customers. This perhaps explains why the uS tends to be reactive rather than proactive in bunker matters.”

North America

company estimates that the use of LNG will potentially save as much as $2.4 million per ship per year on fuel costs. Less than a year ago, Totem Ocean Trailer Express announced plans to construct two new LNG-powered container ships for the Puerto Rico trade, with options for three more vessels for additional domestic service with the General dynamics NASSCO shipyard in San diego, California. Ferry companies in the uS are also taking a serious look at constructing or retrofitting their vessels to use LNG fuel. The Washington State Ferry System (WSF) is North America’s largest ferry operator and the third largest in the world. It has been reported that WSF burns more than 17 million gallons of ultra-low sulphur diesel a year. It is considering retrofitting up to six of its vessels to operate on LNG. Although the capital cost of the gas engines and gas storage tanks is higher compared with conventional diesel equipment and fuel storage tanks, the operator has concluded that fuel cost savings can quickly pay back that capital investment. According to WSF officials, fitting six ferries would cost $75 million and save nearly $8 million a year. The return on investment would take about a decade, with 20 years of service after that. If those six ferries are successful, others could convert to LNG as well. WSF has received conceptual approval from the uS Coast Guard to retrofit the propulsion system with new engines on the six Issaquah Class ferries to use LNG as a source of fuel. Interest in LNG is also driving port development. Earlier this year, Texasbased Waller Marine announced it would build a small-scale LNG facility at the Port of Greater Baton Rouge, Louisiana, to fuel vessels. Waller plans to spend $200 million initially, though that amount could double as it adds capacity. Waller will work with existing port tenant, kanorado Corp, to turn kanorado’s 11-acre facility into a 25-acre joint facility. Clean Energy Fuels Corp, Ferus Natural Gas Fuels, GE Ventures and GE Energy Financial Services announced in September the formation of a consortium to develop LNG in the uS. The consortium, Eagle LNG Partners, will develop regional LNG projects to meet the growing demand in industries

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The provision of LNG bunkering facilities is just one of many issues the Panama Canal Authority has had to address during its massive expansion programme

C

aribbean, Central and South American countries are rising to the challenge not just of delivering low sulphur fuels but of becoming involved in the distribution of low-cost alternatives to heavy fuel oil. Brazil is particularly well placed to supply low-sulphur products and has been marketing the fact internationally. The country is one of the largest suppliers of low-sulphur fuel oil, because Brazilian crude is sweet and the authorities are confident that they can do more. Brazilian multinational Petrobras has been growing aggressively in Singapore to ensure it is well positioned to cater for demand. However, considerable investment is also taking place in alternative products, which are being marketed not only internationally but specifically in Central and Latin America. One alternative product under development is MSAR, an oil-in-water fuel emulsion that is a low-cost substitute for heavy fuel oil, from supplier Quadrise Fuels. The company has contracts in place with the likes of AP Møller-Mærsk to supply the product. ‘Proof of concept’ seaborne trials are taking place this year on two Maersk ships using Wärtsilä and MAN

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engines, progressing to early commercial operations by mid-2014, according to Quadrise. The company has highlighted the serious challenges related to compliance with new progressive emissions standards. “From 2020, new standards can only be met if the fuel oil sulphur content can be dramatically reduced, or if the ship owners can afford the additional cost of on-board emissions scrubbing. The practical and economic feasibilities of the oil refining industry adapting to produce the large volumes of low-sulphur fuel oil or distillates required for this market is in doubt. The associated cost will have major implications for refining process economics and related oil product costs and prices.” Quadrise has also been looking at a joint venture with Ecopetrol to manufacture and market MSAR fuels in the region. It signed a memorandum of understanding with the Columbian oil major and a Texan firm earlier this year. under the terms of this, the companies will jointly identify and assess potential MSAR business opportunities in South and Central America over 12 months. According to Ian Williams, chairman of Quadrise: “We are delighted to be working with Ecopetrol to create

business opportunities for MSAR fuels with them in their region. Quadrise is appreciative of the professionalism and enthusiasm demonstrated by Ecopetrol management to date, and is keen and prepared to move forward promptly with the joint programme.” In October, discussions took place between the Panama Canal Authority and representatives of the union of Greek Shipowners, the International Association of Independent Tanker Owners (INTERTANkO) and the International Association of dry Cargo Shipowners (INTERCARGO). The aim was to consider the canal’s toll structure once the expanded canal is open for commercial use and bunkering facilities. A total of 14% of vessels that transit the Panama Canal are Greek-owned. Liquid and dry bulk carriers are two important segments for the Panama Canal, representing approximately 16% and 23%, respectively, of the total tonnage transiting through the waterway. For the liquid bulk segment, the main commodity is diesel and gasoline exports from the Gulf of Mexico to Asia and South America. The Panama Canal also presented new business initiatives that are under analysis to add value to the route. These include a port on the Pacific side,

Caribbean, South and Central America

Canal expansion is fuel for thought

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logistics parks, top-off operations for dry bulk carriers and bunkering stations to take advantage of the new liquefied natural gas (LNG) segment that will be able to transit through the canal. Meanwhile, Buckeye Partners announced in October that it has reached agreement with Hess Corporation and its subsidiaries to acquire 20 liquid petroleum product terminals with total storage capacity of approximately 39 million barrels for $850 million. The deal included 19 terminals on the uS East Coast, with storage for approximately 29 million barrels of refined petroleum products. A terminal on St. Lucia in the Caribbean has storage capacity of some 10 million barrels of crude oil and refined petroleum products and has deep-water access. The deal is expected to be completed by the end of the year. According to chief executive Clark Smith: “We have a proven track record of value creation through applying the Buckeye model to terminals previously operated primarily on a proprietary basis. We expect that this acquisition, which includes a multi-year storage and throughput commitment by Hess, will be immediately accretive to our distrib-

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utable cash flow per unit, excluding first year transition-related expenses, and should provide long-term support for further distribution growth.” Smith said: “The St. Lucia terminal improves our capabilities in the Caribbean storage market with more geographically diverse service offerings to allow us to accommodate a larger portion of the growing Latin American crude oil production volumes. As a result of this transaction, we believe that our integrated network of marine terminals should allow us to capture meaningful synergies from global logistic product flows through the comprehensive set of terminal services we expect to be able to offer our customers.” Another country that is hoping to benefit from the rising interest in LNG as fuel is Jamaica, with Jamaica’s maritime authority discussing the topic at an International Maritime Organization workshop earlier in the year. The island’s position on the route linking the Panama Canal and uS ports could make Jamaica well positioned to develop as a LNG bunkering facility provided the funding is there for investment. Jamaica-based Petrojam Limited says it benefits from the country’s

strategic location with respect to international shipping lanes, the Panama Canal, the uS Gulf Coast, the uS East Coast as well as its position as a major tourist destination in the Caribbean. In addition, Jamaica also holds a strong position for the movement of container ships between the uS, South America, Central America and the Panama Canal. Petrojam says it is planning to upgrade its refinery located in kingston, Jamaica. The upgrade would expand the capacity of the refinery from 35,000 barrels per day (bpd) to 50,000 bpd and will entail upgrading some existing processing units and adding new processing and waste treatment units. Trinidad and Tobago is another Caribbean state that could benefit from the Panama Canal expansion to provide bunkering facilities. Minister of trade, industry and investment Vasant Bharath, told the Shipping Association of Trinidad and Tobago in September that “in keeping with the government’s thrust to diversify the economy, the maritime industry has been identified as a key sector for development”. “As a nation with a long-standing maritime history, Trinidad and Tobago has always benefited from a favourable

Caribbean, South and Central America

INTERTANKO and INTERCARGO met in October to consider the canal’s toll structure once the expanded canal is open for commercial use and bunkering facilities

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position as a bunker fuel marketer, while reducing our exposure to price risks and dramatically reducing our working capital expenses related to our bunker marketing operations. We also believe that it creates opportunities to grow our fuel oil business in the Caribbean”. The Brazilian energy sector, meanwhile, got a boost from the news that EBX Holding Ltd and BP Products North America had signed a contract to create a new company MFX to import, export, sell and distribute marine fuels under the BP Marine brand. MFX will be jointly controlled by BP and EBX, with each company holding an interest of 50%. The new venture will include a new terminal at Açu Superport, which will aim to supply ships with marine gas oil (MGO) and intermediate fuel oil (IFO). “This initiative aims to ensure companies setting up at Açu Superport have an ongoing competitive supply of high-quality marine fuel for their operations. The contract will also help Açu Superport to become a hub port for marine fuel, recognised in the global market,” said Marcus Berto, chief executive of LLX, part of the EBX group. “This association reinforces BP’s commitment to the Brazilian energy sector, and complements our investments in the exploration and production (E&P), lubricant, aviation fuel and biofuel sectors,” added Luiz Figueiredo, regional director of BP IST in Brazil. As a result of this joint venture, Açu Superport is positioned to become one of the main distribution centres of marine fuel in the South Atlantic, the company believes. Açu Superport is located in São João da Barra, in northern Rio de Janeiro state. The venture has been designed to handle up to 350 million tonnes of cargo a year, ranking it among the world’s largest ports and establishing it as the largest multi-modal industrial port venture in Latin America. The port has an offshore terminal (TX1) and an onshore terminal (TX2), which will jointly offer up to 47 berths and a 17km pier. TX1 has a 3km pier, an approach channel with a depth of 21 metres (to be expanded to 26 metres), a breakwater and up to nine berths. The terminal will be able to handle up to 100 million metric tonnes of iron ore a year and up to 1.2 million barrels of oil a day (bpd), in addition to transfers,

storage and blending activities, among others. The bridge and iron orehandling piers, with a depth of 21 metres, are now completed. TX2 will land and ship the goods of a range of industries within the industrial complex, including offshore support, flexible industries, pig iron, slag and granite. The channel has a length of nearly 5km, a width of 300 metres and depth of 12.5 metres, which will rise to 16 metres. In addition, TX2 will have 2 million square metres for the installation of offshore support industries and is set to become the leading support hub for the oil and gas industry and offshore E&P operations, especially because of its proximity to the Campos, Santos and Espírito Santo basins. An industrial complex is also being built, occupying 90km2, which will house offshore industries, an oil processing plant, steelworks, a metalworking cluster, the largest shipyard in the Americas, which is being built by OSX, the largest thermoelectric power-producing complex in Brazil, with 5,400MW, of MPX, pelletising plants and cement plants, among others. The industrial complex is projected to attract investment to the region of roughly R$100 billion. Curacao-based Curoil, meanwhile, says the port is one of the region’s most developed and best organised ports. Curoil’s main bunker berth is located at Willemstad in the Sint Anna Bay channel. At this berth, Curoil can supply all fuel oil grades and gas oil. The Mega Pier berth, situated 200 metres off the Sint Anna Bay, on the coastline of Curacao, has a T-shaped pier that stretches 100 metres into the sea. Curoil can supply all fuel oil grades and gas oil by an underground pipeline. At the Emmastad Refinery, Curoil can supply high-vanadium fuel oil from nine of the refinery’s jetties. MGO deliveries can be supplied by the Curoil barge alongside at Emmastad. A container vessel can bunker all fuel oil grades and gas oil by the small barge at the Brionwerf. The small barge can supply approximately 300 tonnes of fuel oil and about 90 tonnes of gas oil. Curoil offers offshore bunker deliveries at Curacao, Bonaire and Aruba. The barge fee is $15 per tonne. Curoil offers fuel oil ranging in viscosity from 30cst to 380cst, as well as MGO/dMA. It can supply fuel blends from all grades of high and low sulphur and vanadium.

Caribbean, South and Central America

geographical location, away from the hurricane belt and strategically located between key trade routes connecting North and South America. The maritime industry is a critical facilitator to international trade. Approximately 90% of volume of world trade is carried by seaborne transport. Maritime industry activities, especially seaborne transport, are therefore closely correlated to industrial activity, GdP growth and merchandise trade,” said Bharath. The trade minister added that, in the context of the Panama Canal expansion project, there were many opportunities for Trinidad and Tobago. “The Panama Canal is well placed to be the anchor point of the Caribbean transshipment triangle; key east-west trade routes intersect with north-south connectors, making nearby ports ideal for cargo transshipment; and the edges of the Caribbean transshipment triangle encompass Panama, the Bahamas, and Trinidad and Tobago.” He noted that regional ports, including Colombia, Venezuela and Jamaica, are investing heavily in developing and upgrading their infrastructure and equipment in anticipation of these opportunities, and that meant that Trinidad and Tobago must also take action to capitalise on them. The New york Stock Exchangelisted NuStar Energy announced in August that it had signed a fuel oil supply agreement with a major fuel oil trading company, which it did not name, in order to create a “back-toback” trading model in which NuStar purchases bunker fuel supply from this company to fulfil the needs of its customers in St. Eustatius and the Caribbean. “This trading model will allow NuStar to reduce working capital tied to inventory, reduce exposure to price volatility and hedge ineffectiveness, and better manage operating expenses. In fact, the agreement will help NuStar lower its working capital expenses by $40 million to $50 million, and save the company related attendant interest and hedging costs,” NuStar said when announcing the deal. “This agreement is a very positive step in our efforts to strengthen the bunker marketing operations within our fuels marketing segment, which has been impacted by weak demand and difficult market conditions,” said NuStar CEO Curt Anastasio. It also allowed the company “to remain in a competitive

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Africa

A high-profile stem for Unical at Durban, but high prices put off bunkers-only calls

New impetus Times have been tough for the South African bunker industry, but new developments are on the way

S

outh Africa has seen its share of the bunker market decline in recent years. Last year the volume of bunkers sold in durban hit a 20-year low with 1.1 million tonnes traded in 2012. This year’s figures could be even lower. In August, the International Bunker Industry Association (IBIA) called on the South African government to realise the potential of the ship refuelling market in its ports and the impact that this would have in supporting regeneration. Speaking at the African Ports Evolution conference, IBIA chief executive Capt Peter Hall told delegates: “I think the key message is that Southern Africa offers great potential in the oil and gas market generally and the potential for the area to develop into a marine fuels hub servicing the offshore industry is quite significant.” The IBIA advised the country to move its bunker market to an open economy system; produce fuel in line with global carbon and sulphur restrictions; adjust its fuel pricing structure to be competitive against South American and Asian port options and create safe offshore refuelling areas. Partnering with neighbouring countries for crude cargo purchasing and keeping its port tariffs relevant and competitive could also revitalise an industry on the verge of collapse. The IBIA said it believed that these steps would help stem the decline in South African bunker fuel sales. It says the South African government should closely examine the potential impact of a successful bunkering sector on the country’s GdP and develop a strategy in World Bunkering Winter 2013

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partnership with industry stakeholders, including the oil majors who own the current ageing infrastructure. Hall said: “It is time that we all awoke to the enormous potential that is lying dormant in South African ports. The annual gain of an additional 900 ships a year in durban for example would contribute an estimated ZAR2.4 trillion ($126 million) a year to the South African economy, excluding the value of bunker sales. A growth in the country’s bunkering market would have a huge benefit to the South African economy, specifically in terms of job creation and community regeneration. Competitively priced bunkering facilities in South African ports would also benefit the IBIA’s owner and operator members as well as suppliers and the South African economy.” He added: “The country is strategically very well located to handle vessels servicing the predicted increase in South American to Asia dry bulk trades as well as Asia to South America container traffic. Increased bunkering would mean increased business for port operations firms, oil producers and barging companies, as well as international bunker trading companies.” The IBIA approached Professor Trevor Jones, of the university of kwaZulu-Natal’s unit of Maritime Law and Maritime Studies, to undertake a study of the impact that the loss of bunker fuel sales has had on the economy of Southern Africa. The reasons for South Africa’s decline in the ship refuelling market are numerous, according to the IBIA. The availability of South African fuel has historically been termed as “feast or famine”, which can be attributed

to limited fuel storage facilities and inconsistent refinery turnarounds, with refineries unable to give the shipping market sufficient notice of shutdowns. These occur primarily because the ageing refineries are constantly being upgraded to produce the more lucrative “white oils” rather than residual fuel oil. But an industry insider stressed to World Bunkering: “The extremely high port costs are the main reason behind the exodus of callers. The ports have priced themselves out of the market and there is little appetite from the National Ports Authority to facilitate speedy bunker delivery in port, as the main focus is on servicing container vessels, so the delays, high fuel costs and high port costs together are negative factors driving the decline in bunkers-only callers visiting the ports. “Buenos Aires, especially Zona Común, for instance, can deliver lowsulphur 380cSt at anchorage with minimal agency calling costs – and the fuel is priced nearly $100 per tonne cheaper than in durban with no delivery delays and no port calling costs payable.” In recent years, residual fuel oil production volumes have remained unchanged, with the balance of unsold fuel being exported to eastern markets. It is estimated that around 80,000 tonnes a month is distributed in this manner. These refineries are also unable to produce the low-sulphur, low-carbon, 380cSt fuel that ship operators require. In recent months, however, things have moved on and in November the IBIA was able to announce that it would be working with the South African Maritime Safety Authority (SAMSA) to 53

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Africa

develop a bunkering code of practice for the supply of fuel from offshore barges. Offshore bunkering is currently banned in South Africa, but SAMSA is taking steps to open the market to offshore providers. As a first step, it granted provisional permission to Aegean Marine Petroleum Network Inc to deliver intermediate fuel oil (IFO) in Algoa Bay outside port limits (OPL) area. The proposal relates to ship-to-ship transfer procedures, using a double-hulled storage tanker and smaller double-hulled tankers to effect safe bunker fuel transfer to passing vessels. The vessels are expected to be operational in the spring of 2014. The IBIA will be consulting local industry and other stakeholder groups to develop a code of practice using lessons learnt from the ports of Gibraltar and Singapore, both major bunkering hubs. The association has already supported Gibraltar’s growth by helping to develop a bunkering code of practice for the port. Hall said: “An IBIA working group will work hand in hand with SAMSA to produce a code of practice that will help South Africa develop a safe and commercially viable set of standards based on global best practice. We call on all interested parties, including refiners and shipowners, to engage with the group.”

areas, is piracy. In October, the master and chief engineer officer of an offshore support vessel operating in the Gulf of Guinea were seized during a hijacking. The two, both uS citizens, were eventually freed in early November, but the general secretary of seafarers’ union Nautilus International, Mark dickinson, said the incident highlighted the urgent need for action to prevent West African piracy from deteriorating further. He noted that, while piracy off Somalia has declined significantly over the past year, new figures from the International Maritime Bureau reveal that there were more than 40 attacks officially recorded in the Gulf of Guinea during the first nine months of this year, with 132 crew taken hostage and seven vessels hijacked. Meanwhile, earlier this year, david Amebele, managing director of Ghanabased bunker supplier Inter Maritime Services, was reported to have called for closer regulation in the West African bunker market. According to local reports, he said tighter regulation was necessary to give ship operators more confidence in the sector. He also wants ship management experts to be allowed to get involved in the bunkering business and for “indigenous bunkering companies” to have direct access to products from the state-owned Tema Oil Refinery.

West African moves

Offshore West Africa is a significant bunkering location and this was underlined in September, when major global supplier and trader OW Bunker launched a physical West African offshore fuel supply operation , covering Morocco, Mauritania, Senegal and offshore waters down to the Ivory Coast. OW Bunker Canary Islands is to supply customers with the full range of fuels and lubricants from its newly deployed 8,250 deadweight tonnage (dwt) double-hulled tanker Wappen von Frankfurt. The company says the move complements the company’s existing trading operation across the region and will provide customers with end-to-end bunker and lubricant supply and related services, including slops disposal. Jan Christensen, vice-president, physical supply, at OW Bunker, said: “We know what our customers need in this region – fast and accurate supply, highquality products and being able to avoid unnecessary port calls and lengthy waits. With our own vessel and control over the supply chain, we are able to provide our customers with the highest quality fuels and lubricants in the most efficient and cost-effective way.” The West African market is not without its challenges. One, at least in certain

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Russian update

Russian news News round-up by Olga Bogacheva

Novatek LNg storage and supply network in Poland

Russian company Novatek has bought Statoil Fuel & Retail Polska’s liquefied natural gas (LNG) storage and supply network in Poland through its 100% subsidiary, Novatek Polska, for an undisclosed sum. The network provides storage and supply services to industrial consumers. “Acquisition of Statoil Fuel & Retail Polska assets in the segment of LNG storage plants demonstrates our intention for further development and will strengthen our position in this market,” darek Braton, head of Novatek Polska, commented. This is the Russian company’s second large deal in Poland in the past two years. In 2011, it bought IntregazSystem, the largest LNG distributor in south-eastern Poland. Statoil Fuel & Retail Polska wanted to dispose of the business and focus activities on gas supplies for transport, Novatek explained. The asset fits in with Novatek strategy in Poland and will provide an opportunity to sell more gas, according to a Novatek press release. gazprom Neft expands international operations

Gazprom Neft’s marine fuel subsidiary, Gazprom Neft Marine Bunker (GMB), bought Estonian bunkering company Baltic Marine Bunker at the end of August 2013. This is its second overseas

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acquisition. It bought a Romanian company at the beginning of this year. Soon after GMB took over the company, it supplied about 580 tonnes of low-sulphur fuel oil to a ferry operating between Tallinn and Helsinki. Gazprom Neft Marine Bunker expects the annual sales of marine fuel in Tallinn Port to reach at least 270,000 tonnes. The fuel will be supplied from Gasprom Neft’s refineries. russia's transport strategy approved until 2030

The Russian government has approved a new transport strategy to cover the period to 2030. According to the document, at least RuB70 billion ($2.2 billion) is to be allocated for development of the country’s transport system. Russian prime minister dmitry Medvedev claimed that development of the transport infrastructure should be connected with that of other industries, agriculture and power supplies. Regional demand should be taken into consideration, including the formation of so-called megalopolises – super-sized city clusters. One of the most important goals of the transport strategy is the creation of competitive, high-capacity transport corridors. However, Medvedev stressed that “we should remember the environment” and ensure that any negative effects are “compensated for by moving

to environmentally friendly fuels and improved energy performance”. Two scenarios of transport development during the period until 2030, basic and innovative, are presented in the strategy. The conservative scenario is based on existing programmes, principally the state programme for the development of the transport system to 2020. This assumes the choice will be made from a narrow list of priorities to suppress main threats to national economy and social life. This scenario is based on a RuB70.594 billion ($2.2 billion) investment programme in the transport system. The innovative scenario supposes accelerated balanced development of the country’s transport infrastructure. Transport is considered as an active factor to support dynamic growth of the economy and competitiveness of national industries, which will boost individual regions. This scenario needs investment of RuB106.446 billion ($3.25 billion). LNg bunkering at Archangelsk

Construction of an LNG production and bunkering services facility for marine and river vessels is planned on Moseev Island, according to an Archangelsk municipality press statement. It says that a 5km gas pipeline is to be built for this purpose, from Archangelsk thermal power station to the LNG plant.

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For more information, contact: Rostov-on-Don Tel: +7 (863) 242-44-86 +7 (863) 242-44-87 +7 (863) 242-44-88 E-mail: rostov@ybunker.com Yeisk Tel: +7 (86132) 2-60-64 E-mail:yeisk@ybunker.com Port Kavkaz Tel: +7 (86148) 4-43-47 E-mail: kavkaz@ybunker.com

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Baltic Fuel Company performs first bunkering operation in Novorossiysk

BFC-yug, a subsidiary of Baltic Fuel Company (BFC), bunkered the Malta-

flagged TurkanSaylan dry bulk carrier in the group’s first bunkering operation in the port of Novorossiysk. The bunker tanker Captain Shiryaev supplied 300 tonnes of high-sulphur IFO 380 fuel and 50 tonnes of diesel fuel. A BTk spokesman said that the group planned to increase marine fuel sales in Russian ports in the Black Sea. gazprom ponders ust-Luga LNg plant

Land at ust-Luga port, in the south of Leningrad Oblast, is a prime site for the construction of a Baltic LNG plant, according to Gazprom deputy chairman Valery Golubev. News agency ITAR-TASS quoted Golubev as

saying during a trip to kaliningrad at the end of September that ust-Luga was the preferred place for constructing an LNG terminal because the approach channel already exists. In addition, ice conditions in the south of Leningrad Oblast are more favourable as there is no need for ice-breaker escort in winter. Gazprom has already begun a feasibility study for a Baltic LNG investment project and intends to complete it next year. The annual capacity of the plant may reach 5 billion cubic meters. Gazprom plans to sell some of its LNG as bunkers. ITAR-TASS reported that Shell is the most likely partner in the Gazprom project.

Russian update

“We are in serious negotiations with Gazprom concerning various investment projects connected with the use of natural gas, including the transfer of public ground and river transport to gas fuel,” said Igor Orlov, governor of Archangelsk Oblast. “The main gas pipeline to Archangelsk is capable of delivering 3 billion cubic metres; we already consume 2.2 billion cubic metres. So we need to design network expansion,” he added.

Sakhalin LNg plant

Major energy company Rosneft has signed an cooperation agreement with Sakhalin Administration that includes the construction of an LNG plant. The deal was signed by Alexander Horoshavin, governor of Sakhalin, and Igor Sechin, Rosneft president. According to Sakhalin-kurils information agency, the region offers two possible locations for the production facilities: one site is near Ilyinskaya and the other near Taranay. The agreement allocates sites for the construction of engineering infrastructure, including facilities for the Sakhalin-1 project in which Rosneft companies are involved. On its website, Sakhalin Administration says the parties agreed on a range of issues including: processing of hydrocarbons, fuel supplies for the airports, modernisation of Ohinskaya thermal power plant, oil and oil product supplies and expansion of the fuel filling station network.

Rosneft says that the new Sakhalin LNG plant, with an annual capacity of 5 million tonnes, will be built in collaboration with ExxonMobil. The companies concluded an agreement in February this year. The estimated cost is $15 billion and commissioning of the plant is expected in 2018. At the Petersburg International Economic Forum, Rosneft concluded agreements to supply LNG from this plant to Japanese companies Marubeni and Sodeco (1.25 million tonnes and 1 million tonnes annually) and to dutch-owned multinational energy and commodity trading company Vitol (2.75 million tonnes a year). Energy minister Alexander Novak said a law to liberalise LNG exports could be adopted by the end of this year. Rosneft CEO Igor Sechin said at the forum that the group may involve two other partners in construction of the LNG plant on Sakhalin – existing shareholders Sodeco (30%) and India’s Oil and Natural Gas Corporation (ONGC) (20%).

Rosneft CEO Igor Sechin and Sakhalin governor Alexander Horoshavin sign a supplement to the cooperation agreement

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Welcome to bunkering in the North of Russia

JSC BUNKER C O M PA N Y

 Low/High sulphur  MGO  IFO 30, IFO 40,  IFO 120, IFO 180, IFO 380

www.jsbunker.ru e-mail: arkh@jsbunker.ru

+7 (8182) 65-77-93 Fax +7 (8182) 42-03-27 Tel.

34/1, Dezhnevtsev St., 163035, Archangelsk, Russia

SCADAR was established in Murmansk in 1998. We are physical suppliers at the port of Murmansk and carry out offshore delivery in the Barents sea We are pleased to offer all bunker buyers top quality service and the following range of products, which are well within the ISO8217 quality standards, with full respect for correct sampling procedures. We operate two double hull barges with segregated tanks for carrying multiple fuel grades. We can deliver the products outside port limits for passing vessels with no calling costs, and there are no extra charges for weekends or holidays. Our aim is to benefit our clients with good prices and a reliable service. Scadar Ltd Tel: +7 8152 596 170 Fax: +7 8152 596179 E-mail: scadar@scadar.com Website: www.scadar.com

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OB: Is Gazprom involved in international projects for constructing LNG bunkering terminals? IM: This market is still at an early phase of development. So we have the classic ‘chicken and egg’ situation. What comes first and who will make the first move? We understand the problems, the potential and possible role of our company. We are ready to make the first step and Igor Mainitskiy, head of the LNG export department at Gazprom ready to work further to ensure Export, speaks to Olga Bogacheva about the main issues that will need market sustainable development. So we are trying to bring not to be addressed and Gazprom’s role in the emerging Russian LNG market only our product to the market but also solutions for its delivery and sales to the end-consumers. facilities and also access to the sea. In Olga Bogacheva: Gazprom is a huge In fact, not only are we ready to sell addition, we are working on establishing company. It is clear that bunkering gas but also to provide technology for a client portfolio of interested companies services are not the main priority for the this market. We consult and sometimes and linking with the major regional company’s management. Is there any enter full-scale negotiations about operators. There are several pilot projects long-term programme of development cooperation in construction of bunkering under way now for marine vessels supplies in this area? LNG terminals and bunkering services in Russia and abroad. Igor Mainitskiy: Our main priority is organisation. Now we are at that stage growth of natural gas consumption in all of market development when all parties OB: The first problem for the Russian areas. use of gas as motor fuel for cars should do more than is needed right bunkering companies is the lack of as well as for vessels is very attractive. now. The future efficiency of this market modern regulations for any equipment Even based on the most conservative depends on current potential players. for LNG storage, transportation and forecast, we may expect about 40 billion transshipment. Not a single existing port cubic metres of additional demand in the OB: What is your opinion about LNG is capable of operating an LNG terminal automobile transport sector in Europe pricing in the near and long-term future? that complies with existing requirements. by 2030, and the bunkering sector may IM: It is too early to speak about any What should be done in this area? consume even more. definite independent dynamics of LNG IM: I agree that the development of this Gazprom has always made efforts to bunkering fuel prices. The market is technology and growth of demand is stimulate alternative gas consumption. emerging. In particular, there are serious well ahead of the current legislation. It One of the potential uses of natural discussions about basic principles of is not only a Russian problem. There are gas is as fuel for marine and river vespricing in the LNG bunker segment. also serious debates about amendments sels. Our global goal is to create small Some experts insist on anchoring to and additions to European legislation and medium-sized capacity liquefied gas indices, for example, basing them in this field. Restrictions adopted by natural gas (LNG) production facilities on chemical composition. Others the International Marine Organization equipped for marine delivery as well as claim strict correlation with oil prices is (IMO) for emissions in the Baltic and the establishment of a market for shipnecessary because gas competes with oil Northern Sea, which strongly stimulate ping companies trading in the Baltic and products in the fuel sector, not with gas use of gas fuel, gave a new impulse to Northern Sea. from the pipeline. In any case, the initial this discussion in Europe. economic feasibility study of switching In Russia, it is only recently that we OB: What will be the first step? vessels from traditional fuel to LNG will have begun to understand the necesIM: To enter this emerging market and be most important. Clear criteria and sity of drastic changes in regulations to be able to meet potential demand, we principles of LNG bunker pricing will be covering construction and performance have first to provide the LNG. So the first determined by the results of this study of LNG production, storage and transstep is setting up LNG production and Note: Gazprom Export supplies gas to shipment facilities. And here the role delivery infrastructure in the Baltic Sea. more than 20 countries. In 2012, the amount of every participant in this chain, from The optimal region for this purpose is the of LNG exported to countries that don’t producer to consumer, is important. All coast of the Finnish Gulf. There we have belong to the Commonwealth of Independent market players should work together to the raw material, gas from the pipeline, States was 138.8 billion cubic metres. cope with the huge number of necesplus available land for the production

Key LNG issues

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Russian update

sary changes. Being a responsible LNG producer, we are participating in discussions about new gas liquefaction and storage regulations. But bunkering companies, important players in this market, should also join these efforts.

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AMK Group of Companies Your bunker supplier in the port of Murmansk and other ports of Murmansk region. We supply: » bunker fuel » all types of petrol » fuel oil M-100 » fuel IFO-380, IFO-180, IFO-30 AMK Group of Companies 86 Podgornaya Street, Office 413, Murmansk, Russia 183038 E-mail: amkoil@mail.ru

Tel/Fax: 007 (8152) 287828 Tel/Fax: 007 (8152) 287337 Tel/Fax: 007 (8152) 286028

Forum Ltd. Bunker trader: Aleksey Miloradov Phone: +7 (812) 449-65-91 Mobile: +7 (921) 757-11-33 E-mail: trade@forumbunkering.ru Yahoo ID: aleksey.miloradov

www.forumbunkering.ru

Physical supplier of LSFO, HSFO and MGO in the port of Saint-Petersburg

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Russian update

Russian president Vladimir Putin

Independents fight back The big issue in the Russian bunkering sector in recent months has been an official move to ban offshore bunkering and, in effect, place all bunkering in the hands of large, vertically integrated energy companies

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fter being taken by surprise, the independent bunker players have fought back and appear to have largely retrieved the situation but uncertainties remain. The episode began with a new ruling from Russia’s customs authorities that took effect this summer. It seriously affected Russian bunkering companies using tankers to supply vessels. The problem first became apparent at the Baltic Sea port of ust-Luga but has since spread, including to ports in Russia’s Far East. Russia’s chief of the Central Energy Customs (CEC), Pavel Strelnikov, apparently ruled that if a port has a dedicated oil terminal, as is the case at ust-Luga, bunkering operations may only be carried out at the berth, according to Russian news provider PortNews. PortNews reported that it was told by major players in the market that all tankers calling at ust-Luga are currently supplied with bunkers at the inner anchorage. According to the bunkering companies, the CEC’s ruling means that bunkers must be delivered at the port’s three oil terminals, JSC RosneftBunker, LLC Novatek-ust-Luga and, still under development, Sibur-Portenergo. However, market insiders say the oil terminal operators refuse to allow bunkering operations at their berths, as they

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do not have the necessary equipment or capabilities. Most Russian bunkering companies surveyed by PortNews said that, as a result, the bunkering of tankers, which constitute a large proportion of calls at the port of ust-Luga, will be stopped. The row is known to have reached the ears of the country’s president, Vladimir Putin, when a number of senior figures in the bunker industry, including the president of Rosneft, Igor Sechin, took the issue to him recently. The deputy head of the Federal Customs Service of Russia, Ruslan davidov, has been quoted as saying that some shipowners resorted to complicated schemes to get duty-free fuel and the ‘alongside-only’ rule was developed in response to that. According to some reports, the new policy is now being applied only to stems of more than 1,000 tonnes. The row intensified when the contents of a letter from Rosneft president Igor Sechin to the Russian Federation’s prime minister dmitry Medvedev became general knowledge after PortNews obtained a copy. It effectively proposed putting the Russian bunker market into the hands of large, vertically integrated energy companies, with a priority given to companies with longterm contracts. According to the letter, which was dated 23 September, the volume of

Russia’s bunkering market is estimated at between 8 million and 9 million tonnes per year, with subsidiaries of the big energy companies accounting for 70% of sales. Sechin mentioned RN-Bunker, LukOIL-Bunker and Gazprom Neft Marine Bunker. The letter also said that the rest of the Russian bunkering market is made up of a pool of independent players that “purchase fuel from mini plants – so- called ‘teapot refineries’, producing low-quality products”. Sechin claimed: “Later, these dumped products are sold through shadow and offshore schemes, leading to considerable shortfall of taxes in the budget.” Sechin argued that, as result, the tax authorities could not enforce proper control of bunker fuel sales. Medvedev is reported to have responded by ordering transport minister Maksim Sokolov and head of the Federal Customs Service Andrey Belyaninov to put together a report on the development of port infrastructure and the bunkering market. Meanwhile, the bunker suppliers, in the form of their representative organisation, the Russian Association of Marine and River Bunker Suppliers (RAMRBS), filed a lawsuit in Moscow arbitration court, on 7 October, to invalidate the order signed by CEC chief Strelnikov, which actually banned off-shore bunkering services.

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Russian update

Vladivostok

The new procedures were formally based on the need “to provide uniform application of custom regulations in the Russian Federation”. As mentioned, the most dramatic situation developed in ust-Luga, where major Russian energy companies have important terminals. All tankers use the terminals in the inner anchorage because the berths are not suitable for bunker barges to come alongside moored vessels. So bunkering services at the port were cancelled completely. In Vladivostok, the situation became so acute that the bunker industry raised the issue during a meeting attended by President Putin, held to discuss development of the Primorsky kray region. At that time, Rosneft president Sechin called CEC’s actions “illegal”. However, CEC deputy head davidov objected to that claim and said that certain vessels used to export fuel under the pretence of bunkering operations and that the amount of unpaid custom duties had become significant. As a result, President Putin ordered officials to examine the situation carefully and ensure that, while nobody broke the law, there were no unnecessary restrictions for businesses. World Bunkering has been told by market experts that the CEC’s claims were ridiculous. One said: “It is difficult to imagine that Maersk, Zim or CMA CGM, with their long-term contracts with RH-Bunker or Gazprom Neft Marine Bunker, where the price 62

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is calculated with Platts discount, will discharge fuel from vessels’ tanks and resell it.” They added: “It is impossible, just from the technical point of view, because container carriers are equipped with weak pumps. Besides, just try to imagine a geographical point where such an operation is possible. The single one – which may be thought of in a dream only – is North korea, but a captain of sound mind will never go there.” It is difficult to tell how much money the bunker suppliers have lost so far, as not all of them are prepared to discuss the situation openly. However, there are rumours that in just the first three weeks after the ban was enforced at ustLuga, 23 bunker stems to tankers were cancelled. The newspaper Vedomosti, quoting the head of the Baltic Fuel Company (BFC), estimated the total losses of all operators at the port at $20 million. BFC’s own sales were down by about 30%. RAMRBS claims that new custom requirements clearly contradict the provisions of the Convention on Facilitation of International Maritime Traffic and the International Convention On Simplification And Harmonization Of Custom Procedures. The ban is also claimed to violate provisions of section 1 of Article 12 of the Federal Customs Regulation, which require trade facilitation. RAMRBS said in a statement that the ban had a strong negative impact on sea ports throughout the country

and reduced their attractiveness. The message was sent to all relevant bodies, including the Federal Anti-Monopoly Service, the Ministry of Transport and the Prosecutor General’s Office. The Ministry of Transport sent proposals for development of the Russian bunkering market to the government on 31 October. The officials suggested that the amount of oil products of “questionable quality” may be reduced by strengthening requirements on the quality of fuel supplies. They recommended introducing new amendments to the technical regulations of the Customs union. They also proposed “tightening safety precautions” for bunkering operations, encouraging construction and modernisation of special bunkering berths. They also recommended encouraging the construction of infrastructure for LNG bunkering services. RAMRBS opposes these amendments. It is known from statistics that independent suppliers perform about 58% of all deliveries. The association says it has information confirming that the vertically integrated oil companies own only 19 of the 200 bunker tankers operating in Russia. In addition, it says, 90% of refineries where bunker fuel is produced are not owned by the big oil companies or their subsidiaries. The association proposes to introduce “compulsory self-regulation in the industry by law”. It says: “This will relieve the government of responsibility to control market operators’ activities.” World Bunkering Winter 2013

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Russian update

Nevsky Shipyard at Neva-2013

A centenary to remember 2013, the year of Nevsky Shipyard’s 100th anniversary, has been a successful one for the company and full of production events, including the receipt of a defence order

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evsky Shipyard is currently carrying out two important projects. The first involves multi-purpose salvage vessels for the MPSV07 project. The shipyard is building four vessels ordered by Russia’s Federal Agency for Marine and River Transport, intended for the State Marine Pollution Control, Salvage and Rescue Service of the Russian Federation (Gosmorspassluzhba). The vessels’ multi-functionality makes them unique among the other dry-cargo vessels. The MPSV07 lead project vessel Spasatel karev was delivered at the end of 2012. In August 2013, the delivery-acceptance act for the second multi-purpose salvage vessel, Spasatel kavdejkin, was signed. Fitting works are now being carried out on the third vessel, Spasatel Zaborschikov, and the fourth vessel is under construction. The second project – RSd49, for Russia’s North-Western Shipping Company – includes 10 multi-purpose, river-sea, dry-cargo vessels with deadweight tonnage (dwt) at 7,150dwt. The main feature of the RSd49 project vessels is the existence of a large middle hold, 52 metres in length. Two vessels, Neva-Leader 1 and Neva-Leader 2, were successfully delivered to the customer at the end of 2012. This year, Nevsky Shipyard delivered four dry-cargo vessels. The remaining four dry-cargoes are currently under construction. Nowadays, RSd49 project motor vessels transport general cargoes from World Bunkering Winter 2013

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northern European ports to Russian river ports and southern European sea ports. In the period from November 2012 to 25 October 2013, the five RSd49 project vessels transported 220,000 tonnes of cargo. This autumn, Nevsky Shipyard once again took part in the International Exhibition of Shipbuilding, Shipping, Offshore Energy, Ports and Oceanography – Neva-2013 – which was held in St Petersburg from 24-27 September. More than 650 companies from 37 countries participated in what was the 12th annual exhibition. As part of the event, Nevsky Shipyard exhibited its current shipbuilding projects, as well as the modernisation and remodelling projects in which it is involved. Every day, the Nevsky Shipyard stand was visited by a large number of registered participants, as well as interested visitors. delegates could get information about the principal areas of the shipyard’s business, such as shipbuilding, ship repair and machine building; get answers to questions of interest; and meet representatives and managers from the company. Thanks to the efforts of the organisers, the exhibition has become a significant event within the shipbuilding industry and offers professionals a useful opportunity to exchange opinions with colleagues and representatives from other Russian and international companies and to view a range of design engineering companies, manufacturers and suppliers of equipment all under one roof.

Nevsky Shipyard was an active participant in the exhibition’s business programme. In its anniversary year, Nevsky Shipyard has also started to carry out defence orders. At the beginning of October, Nevsky Shipyard LLC was granted a certificate for the development, production, testing, installation, mounting, maintenance, repair, utilisation and implementation of armament and military equipment, issued by Russia’s Federal Service for defense Contracts. On 1 November 2013, representatives from the Federal Agency for Weaponry, Military and Special Equipment and Material Facilities Procurement (Rosoboronpostavka), the Russian Federation’s Ministry of defence and Nevsky Shipyard LLC signed a state contract for the construction of a sea tanker as part of the 23130 project. Nevsky Shipyard won the open competitive tender for the project and is due to deliver the tanker at the end of 2016. If 2013 is anything to go by, this is just the beginning of a new successful period in the shipyard’s long history. For more information, contact: Nevsky Shipyard LLC Fabrichny Ostrov 2, Schliesselburg, Leningrad Region, RuSSIA 187320 Phone: +7 (0)812 494-83-38; +7 (0)81362 78-702 Fax: +7 (0)81362 77-666; +7 (81362) 78-707 E-mail: sec2@nssz.ru Website: www.nssz.ru 63

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Innovation Wärtsilä is to make its entire portfolio of two-stroke engines available as low-pressure, dual-fuel (DF) versions

LNG or methanol? Both alternative fuels have their advocates as the search continues for a “clean and green” alternative to fuel oil

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he development of liquefied natural gas (LNG) as a marine fuel continues apace, but it is not the only game in town. delegates at ferry sector trade association Interferry’s 38th annual conference in Malta heard differing views on the best alternative to intermediate fuel oil (IFO) and marine gas oil (MGO). Björn Rosengren, president and CEO of engine giant Wärtsilä, said LNG was a clean, viable and reliable option that should no longer be a cause of concern regarding price, availability and safety. “We are convinced it will be one of the main marine fuels of the future and much of our R&d spend is dedicated to this,” he confided. The company already had a reference list of more than 200 marine and land-based installations with a total of 77 million running hours. Gas prices made a “very convincing” argument for LNG and the fuel was now easily available throughout Europe – with fears about lack of bunkering infrastructure being eased by well-proven technology allowing ports to produce supplies through small-scale liquefaction plants. Customised solutions for onboard storage had been developed, while questions about bunkering with passengers aboard were being answered by operational experience and a strong safety record, notably in Scandinavia. “Viking Grace is a benchmark,” Mr Rosengren concluded.

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“The ship is bunkered six times a week during a one-hour stop in Stockholm.” In contrast, Per Westling, managing director of Sweden’s Stena RoRo, explained why the company is converting its 25-vessel fleet to methanol by 2018. It offered similar emissions reductions to LNG, was easy to store in regular tanks and prices looked stable. “Conversion to methanol is considerably less expensive and basically just involves the fuel injection and tank ventilation systems. For LNG, you have to change everything except the engine block and crankshaft. The environmental and cost benefits led us to methanol,” he added Both fuels are among the options for the Green Ship of the Future project, a study by 14 partners from the danish maritime cluster that also covers machinery, propulsion and lightweight materials. Emissions and fuel reductions are being benchmarked against operational data from destination Gotland’s M/S Visby on service in the Baltic. dNV business and product development manager Claus Winter Graugaard said that potential emissions savings are almost 100% for sulphur oxide (SOx), over 90% for nitrogen oxide (Nox) and 35% for carbon dioxide (CO2) – while fuel bills could be cut by 23%. Meanwhile, Wärtsilä says it has successfully conducted full-scale testing of its low-speed two-stroke dual-fuel engine

running on gas. It is now introducing a full new range of engines based on its established and well-proven low pressure technology. Wärtsilä says it envisages that, by 2020, more than a quarter of new buildings could be designed to run on gas fuel. Wärtsilä says: “The implications of this for ship owners and operators are such that the new engine is already being referred to as a game-changer for merchant shipping. The first engine utilising this technology, the Wärtsilä RT-flex50dF, will be available for delivery in the third quarter of 2014. Other engines from the company's new Generation X series will follow and will be available for delivery during 2015 and 2016.” The entire portfolio of Wärtsilä two-stroke engines will be available as low-pressure, dual-fuel (dF) versions. The benefits of this technology are significant, the company claims. It says: “Compared with other technologies, studies show that Wärtsilä’s low-pressure dF engines offer capital expenditure reductions of 15-20 per cent. This is achieved through a substantially simpler and lower-cost LNG and gas-handling system, operating at pressures below 10 bar, and because no further exhaust gas cleaning systems are needed to meet future emission regulations. The new engines are IMO Tier III emissions compliant in gas mode, and the minimum Tier II level is achieved with liquid fuel.”

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Innovation The SAACKE solution uses its patented ventilator unit, the VentSep, as well as a desulphuriser and a special filter unit to remove 80% of fine particles

Scrubbers hit the market As the 2015 introduction of the 0.1% sulphur limit in emission control areas draws closer, more companies are committing to abatement technology

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erman oil and chemical tanker operator Carl Büttner Shipmanagement has ordered Saacke’s innovative exhaust gas purification system. The company says the LMB Scrubber will pay for itself in about two years. Installation on the 15,160dwt, Gibraltar-flag tanker Levana is due to be completed by the end of November. A press statement from Saacke explains the background to the need for sulphur reduction and points to the 2015 0.1 percent sulphur limit in the North Sea and the Baltic Sea. It says: “Refitting existing ships to run on alternative fuels is either impossible or extremely difficult, which is a sizeable problem. In contrast, due to the compact design of the LMB Scrubber from Saacke, most ships can be easily refitted and the system significantly undercuts the required limit values.” The Saacke system uses a patented ventilator unit, the VentSep, as well as a desulphuriser and a special filter unit. By separating the soot using a dry process, 80% of the fine particles are separated. The majority of the soot produced – up to 200 kilograms per day – does not reach the spray nozzle filter and is not mixed in with the sludge, but is instead collected while dry and disposed of or processed ashore. Bremen-based Saacke says that 99% of the sulphur particles in the exhaust gas are filtered by a spray nozzle scrubber World Bunkering Winter 2013

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using an atomised water spray and a water cascade. A 1MW test plant for the LMB Scrubber has been set up at Croatia's Viktor Lenac shipyard for crew training and sales promotions. Meanwhile. Norway’s largest cruise and ferry operator, Color Line, has ordered Wärtsilä’s Open Loop Scrubber systems for three more of its ships. Wärtsilä, in a statement, claims to hold a “leading position in the scrubber market with 36 ship sets, totalling 75 scrubber units, either already installed or in the pipeline”. Each vessel will be fitted with four systems designed to clean emissions of sulphur oxide (SOx) and particulate emissions. The Wärtsilä systems will enable the vessels to comply with current and anticipated environmental legislation, and to operate without restrictions in emissions control areas (ECAs). The contract was signed in September 2013 and it follows a similar order placed in June 2013 to retrofit Color Line’s SuperSpeed II ferry. The new contract covers the company’s SuperSpeed I, Color Magic and Color Fantasy ships. SuperSpeed I sails between Norway and denmark, while the other two vessels link Oslo, Norway, with kiel, Germany. “Color Line sees environmental issues as a priority and

the use of Wärtsilä exhaust gas cleaning systems on another three of our vessels is a significant step towards our goals in this respect. The marine sector is obligated to operate in a more sustainable manner and we applaud Wärtsilä for its leadership in environmental performance enhancing technologies,” says Jan Helge Pile, senior vice president, marine and technical, at Color Line Marine A/S. “Wärtsilä continues to demonstrate its leadership in the delivery of innovative technologies that enable ship owners and operators to meet the dual challenges of environmental compliance and rising operating costs. Our exhaust cleaning systems are one of the increasingly important elements of this strategy, offering an efficient and costeffective alternative to low-sulphur fuel," says Sigurd Jenssen, director, exhaust gas cleaning, environmental solutions, at Wärtsilä Ship Power.

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Legal

Mixed fortunes There have been a number of bunkering disputes reaching the court in recent months, including a victory for the owners and managers in a ‘magic pipe’ case and a mixed reaction to the ruling in the Mangouras case. Meanwhile, regulatory moves include further calls to bring forward the review of low-sulphur fuel availability from 2018

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he International Association of Independent Tanker Owners (INTERTANkO) has welcomed Captain Mangouras’ acquittal from charges of criminal damage to the environment over the Prestige oil spill, but is “deeply disappointed at his criminal conviction for disobedience”. The master of the Prestige, Apostolos Mangouras, and the vessel’s chief engineer, Nikolaos Argyropoulos, have finally been acquitted by the Spanish Courts of criminal damage to the environment, 11 years after the accident. Also acquitted was José Luis López Sors González, the former head of Spain’s merchant marine department, which means that the Spanish state will not be held responsible for the disaster. The courts failed to find anyone guilty of directly causing the tragedy in November 2002, when the laden tanker Prestige broke up and sank off the Spanish coast, spilling some 50,000 tonnes of oil. “We are deeply disappointed that Captain Mangouras was convicted as criminally responsible for serious disobedience to the Spanish authorities during the incident, and that he has been sentenced to nine months in prison – a sentence that he is unlikely to serve because of his age. He was held for two years (85 days of which was in a high-security prison) prior to any formal enquiry, until the vessel’s World Bunkering Winter 2013

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P&I Club put up Euro 3 million as bail,” INTERTANkO said. His actions have been described as “exemplary” by the vessel’s flag state, and yet he has been treated as a criminal. Confronted with refusal by the Spanish authorities to give the damaged ship refuge, Captain Mangouras had done everything possible to protect crew, ship and cargo and to protect the environment by minimising pollution – including remaining on board with Argyropoulos after the crew had been evacuated, to try to save the ship. “However, against his judgement, he was forced by the Spanish authorities to take a series of actions that resulted in the damaged tanker being taken out to sea in appalling conditions. INTERTANkO considers the conviction and sentencing of Captain Mangouras as lamentable, inexcusable and fundamentally wrong, setting a precedent for treating as criminals ships’ masters who try to do their best for seafarers, ship and environment when under extreme adverse circumstances. Magic pipe acquittal

Meanwhile, there was good news for the owner and manager of a ship involved in a ‘magic pipe’ case. There have been numerous uS examples of these, where a change to a ship’s oily water separator allows waste liquids to be discharged in contravention of pollution regulations.

Cases have also started coming to court relating to use of fuel that did not comply with uS sulphur requirements. Angelex, the owner of the Antonis G Pappadakis, and kassian Maritime Navigation Agency, the manager, were acquitted of 16 charges alleging that they discharged bilge water in violation of the Act to Prevent Pollution from Ships and attempted to hide this from the uS Coast Guard (uSCG). In the past, many magic pipe cases have been brought based on a falsified record book, or lying to the uSCG. Both Angelex and kassian were represented by magic pipe specialists George Chalos and Briton Sparkman of Chalos & Co and Patrick Brogan of davey & Brogan. The jury’s verdict came after two days of deliberation following a nineday trial before district judge Mark davis. In finding Angelex and kassian not guilty, the jury rejected claims by the department of Justice that the alleged illegal conduct was performed by the vessel’s crew members with the intent to benefit Angelex and kassian. Chalos & Co said in a statement: “Notably, all of the witnesses in the case confirmed that any illegal conduct occurring on board the vessel was hidden from Angelex, kassian, and even the master of the vessel, and was done without any intent to benefit either company. The defence further established that such 67

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Legal

conduct was in violation of the vessel’s “zero tolerance” pollution prevention policies and procedures, which strictly prohibited crew members from taking any “shortcuts” to bypass the vessel’s pollution prevention equipment. Bunker disputes

While a dispute between dan-Bunkering and Chemoil went to jury trial in San Francisco in October, the parties settled out of court. Meanwhile, Scandinavian Bunkering’s attempt to sue Norfield Shipping for unpaid bunkers failed. Bunker supplier kPI Bridge Oil found itself in court over allegations that it had wrongfully arrested a ship for unpaid bunkers. kPI is understood to be claiming $750,000 for unpaid bunkers, arguing that the supplier has title to them until the payment for them is made. Standard bunker contract

The Baltic and International Maritime Council (BIMCO) has started work to update the Standard Bunker Contract. Work on the project begins in Copenhagen in October and will move to Singapore later in the year. It is hoped to have a first draft ready for the documentary committee to review at its spring 2014 meeting in dubai. According to BIMCO, the trade organisation was approached early in 2012 by a group of shipowners with a request to update the Standard Bunker Contract to reflect changes in bunkerrelated legislation and practice. “They felt that the time was right for another attempt to establish a global standard. The new version will involve bunker interests from Singapore as well as Western Europe, and it is very much hoped that this time a common set of terms can be agreed that will help harmonise marine fuel purchase around the world.” According to Grant Hunter, BIMCO’s chief officer for legal and contractual affairs, the project is an interesting one. “It will be BIMCO’s third attempt to produce a bunker supply contract. The first attempt, FuELCON, was a hotly debated subject, but was ultimately felt to be too favourable towards purchasers so was rejected by the suppliers. Our second attempt, the Standard Bunker Contract (issued in 2002) addressed the issue of correcting the balance – quite successfully in our opinion. unfortunately, this contract did not seem to grab the interest of suppliers either - we don’t know whether this 68

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may have simply been through poor marketing on our part. “However, having been approached by a number of shipowners requesting an updated edition of the Standard Bunker Contract recently, we have agreed to start the process, as there is clearly a demand for this. Our preliminary study into supplier’s current contracts has indicated, much to our surprise, that the terms and conditions in the Standard Bunker Contract have frequently found their way into supplier’s terms and conditions. “We have found, in some cases, that only the order of the clauses has changed, while the content remains faithful to the BIMCO agreement. This is very encouraging for us as it indicates that in many respects we must indeed have got it right with the Standard Bunker Contract. The issue seems to lie with getting suppliers to accept ‘BIMCO terms’. This is something we will tackle in the revision, which will bring the contract up to date to reflect changes in legislation and commercial practice. There will be considerable focus on sampling and quality issues as part of the revision. “We intend to engage with bunker suppliers from Europe and Asia during the process so that we can get their views on the standardisation of terms and conditions for buying bunkers. The next meeting of the sub-committee is on 26 November, when we should get a clearer picture of the tasks ahead. We are fortunate to have on the subcommittee not only shipowners keen to see a standard contract emerge but also suppliers and the incoming president of the International Bunker Industry Association (IBIA). We are also in touch with the Singapore Bunker Committee, which we will liaise with at a later stage.” Low sulphur review

Meanwhile, momentum has been gathering pace to bring forward from 2018 to as early as 2015 the review of availability of low-sulphur fuels to meet the 2020 0.5% global cap requirement. Many industry players have argued that leaving the review until two years before the planned implementation would leave little time for refineries to address the situation should supplies fall short. The International Chamber of Shipping has been arguing in favour of an earlier review date for some time, and the uk has been backing the case for an early review – a move supported by the IBIA.

As more and more locations declare emission control area requirements, including Hong kong, demand for low-sulphur fuels looks set to continue to grow. “The shipping industry needs some definitive dates to plan implementations on board; the same information is required for the refining industry and the bunker sector.” uncertainty around dates is likely to delay crucial investment decisions and the IBIA believes that the shipping and oil industries need clarity. The International Marine Organization’s (IMO’s) MARPOL Annexe VI marine pollution regulation stipulates a 1 January 2020 start to the 0.50% rule, but this could be extended to 2025, subject to the outcome of the availability study. According to IBIA chief executive Peter Hall: “Our members need clarity – the sooner that the availability study is undertaken, the better.” IBIA members are being asked to indicate how strongly they support earlier undertaking of the availability study. The IMO currently requires the review of the availability of 0.50% sulphur fuel to have been completed by 2018. The start date of the review has been considered by an IMO correspondence group. This reported to the 62nd session of the IMO’s Marine Environment Protection Committee in 2011 that the start date should be between 2015 and 2017 for the review. The correspondence group’s report did not favour a start date before 2015. The committee has yet to take a decision on the appropriate date for the start of the review. The IMO has designated three emission control areas (ECAs) that are currently in effect: the Baltic Sea (sulphur oxides only); the North Sea ECA (sulphur oxides only), which includes the English Channel; and the North American ECA (sulphur oxides, nitrogen oxides and particulate matter). It has also designated the uS Caribbean Sea ECA (sulphur oxides, nitrogen oxides and particulate matter), which will take effect on 1 January 2014. IMO secretary-general koji Sekimizu has also given his backing for an earlier review of low-sulphur availability. While some industry players have suggested that the global cap in 2020 may be put back by five years, others suggest that the global cap will go ahead in 2020, perhaps following negotiations over certain types of vessel or possible exemptions. World Bunkering Winter 2013

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Clean Marine wins contracts As competing scrubber systems come onto the market each new contract attracts considerable attention, as has been the case with dorian's choice for its latest VLGC newbuilding

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orway-based manufacturer Clean Marine is to supply exhaust gas cleaning systems (EGCS), or scrubbers, for a very large gas carrier (VLGC) being built for dorian LPG in South korea by Hyundai Heavy Industries (HHI). Installation is scheduled for the second quarter of 2014. The scrubbers will enable the new dorian LPG vessel to comply with impending sulphur emissions limits in emissions control areas (ECAs) while continuing to use residual fuel oil rather than switching to distillate. Nils Høy-Petersen, CEO of Clean Marine, says: “The contract signals growing demand for Clean Marine’s unique and competitive multi-stream EGCS solution. We are very pleased to be selected by HHI, the world’s largest shipbuilder, and look forward to delivering a cost-effective solution to help dorian LPG comply with existing and pending emissions regulations.” dorian LPG has offices in the uS, uk and Greece and owns and operates three modern VLGCs and one pressurised LPG vessel. In addition, dorian LPG has ordered three fuelefficient VLGC newbuildings from HHI, with deliveries in 2014, and holds an option for three additional eco-VLGCs. The company says: “These vessels are designed with the highest fuel efficiency available and will be among the first

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VLGCs with ME-G type engines to enter the worldwide fleet.” dorian LPG recently announced that it is taking over 11 VLGC newbuilding contracts, and two optional eco-VLGCs from Scorpio Tankers Inc. This brings the number of firm fuel-efficient VLGC newbuildings on order to 14, with five optional eco-VLGCs. Clean Marine has developed an EGCS based on the advanced vortex chamber technology that provides unique particulate matter trapping efficiency. The system’s integrated fan and gas recirculation technology also allows the one EGCS unit to simultaneously serve several combustion units. The manufacturer says that the system supplied to dorian LPG is a hybrid one that allows the vessel to operate seamlessly in all types of water (including low-alkaline and saline water) without loss of efficiency. It adds that its scrubber “meets the current pH limit for washwater discharges with good margin”. Høy-Petersen says: “For vessels operating in European/uS waters, inside the ECAs, a maximum sulphur limit of 0.1 per cent will apply from 2015. The Clean Marine system supplied to the new dorian LPG vessel will clean both sulphur oxides (SOx) and particulate matter emissions from one main engine, three auxiliary engines and one boiler. In total, a single Clean Marine EGCS unit will manage five exhaust sources.”

Clean Marine makes the economic case for using scrubbers by pointing to the average cost difference between residual with any sulphur content and distillates with maximum 0.1% sulphur of more than $300 a tonne. It adds that the difference is increasing. It also says that, with an EGCS installed, only one fuel type is required, rather than multiple fuels with different characteristics. In a typical case, according to Clean Marine, the payback time for the ship owner is in the region of one to two years, depending on trading area, size, speed and fuel spread, although, for world-wide operation, closer to six years’ payback time is realistic. However, for large installations and continued operation inside ECAs, the payback time may be just a few months. A certified, full-scale Clean Marine EGCS is in operation onboard the handymax bulk carrier Balder, which, in September, became the first vessel in the world to operate a scrubber in a uS ECA zone. upon arrival in Baltimore last week, the vessel’s master sought approval from the coast guard to enter and exit the ECA zone using high sulphur fuel oil with EGCS, rather than burning the more expensive 1% sulphur content fuel. Officials from the uS Coast Guard conducted a Port State Control inspection and confirmed that the Clean Marine EGCS installed onboard was

Equipment & Services

ExxonMobil now has three flowmeters in operation in Singapore

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Equipment & Services

operating satisfactorily and found to be in full compliance with the MARPOL Annex VI marine pollution restrictions as an equivalent to using low-sulphur fuel oil. Seal of approval

The Maritime and Port Authority of Singapore has approved use of ExxonMobil’s mass flow metering system on two more bunker tankers. ExxonMobil Marine Fuels & Lubricants port-secured mass flow metering system is now available on board an additional two ExxonMobilchartered bunker tankers in Singapore, bringing the number of approved vessels to three. According to the oil major, the system can help save vessel operators up to an estimated three hours and S$7,000 per delivery and provide increased transparency during the refuelling of marine vessels. The system is claimed to result in a more efficient and simplified refuelling process for vessel operators. It has been

developed in close collaboration with the Maritime and Port Authority of Singapore (MPA) and the Standards, Productivity and Innovation Board (SPRING) Singapore. “Recent media reports further highlight that fuel quantity shortages remain an ongoing issue facing marine operators, and the expansion of ExxonMobil’s mass flow metering capability will help to address this,” says Iain White, field marketing manager at ExxonMobil Marine Fuels & Lubricants. “With an average bunker delivery costing approximately $600,000, the mass flow metering system helps ensure that marine operators get what they pay for.” ExxonMobil says that benefits for marine industry customers, suppliers and regulatory bodies include improved accuracy and efficiency. It says that the mass flow metering system introduces efficiency into the entire bunkering process by measuring fuel mass directly and reducing the uncertainties associated with density, temperature

and other variables such as varying tank geometry. The company adds that changes in fuel temperature and density during the refuelling process can lead to additional costs for vessel operators. An estimated $7,000 saving can be achieved by measuring these variables in real time with the mass flow metering system. The system can also bring significant additional savings by avoiding human calculation errors when using traditional tank dipping. With refuelling integrity requiring more than a secure meter alone, the system has both a calibrated and certified meter and tamper-evident seals fitted by the Weights and Measures Office of Singapore. The system also has independent sealing of the system’s associated pipelines, valves, gauges and barge equipment. ExxonMobil was the first bunker supplier to adopt a mass flow metering system approved by a port authority the MPA - for bunker fuel delivery in June 2012.

Idling protection

Hempel’s new product is designed to cope with prolonged idle period and switching between slow and fast steaming Coatings supplier Hempel claims its new Hempaguard hull coating concept for the shipping industry offers both outstanding resistance to fouling during idle periods and significant fuel savings. The company's ActiGuard technology has been five years in development and is based on silicone-hydrogel and biocide science. It is available as two separate products: Hempaguard X5 and Hempaguard X7. ActiGuard integrates silicone-hydrogel and full diffusion control of biocides in a single coating. Surface retention of the biocide activates the hydrogel, which effectively holds fouling organisms at bay, cutting friction to a minimum while utilising a minimum amount of biocide. It also has the long-term stability and mechanical properties required of a durable solution. Hempel says its tests show excellent fouling resistance of up to 120 days during idle periods plus fuel savings of 6 per cent on average. Group product manager Torben Rasmussen says: “Our tests have shown that Hempaguard retains its effectiveness when switching between slow and fast steaming anywhere in the world as well as during extended idle periods of up to 120 days.” “This is particularly interesting for bulk carriers that can be redirected at short notice, as well as for larger container vessels and tankers that may wish to increase speed to meet schedules, or slow steam to achieve extra fuel savings,” he adds.

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Torben Rasmussen says the new coating system shows excellent fouling resistance of up to 120 days during idle periods

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The 2013 Hong kong convention included sessions on key industry issues, as well as an in-depth interactive focus on the IBIA’s future strategy

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elegates are likely to remember the International Bunker Industry Association (IBIA) convention for a long time, as a positive contribution to determining the association’s way forward. It was also packed with informative debates on industry issues. Hong kong itself is addressing the issue of ship emissions in port. So it was appropriate that the keynote speakers gave the government view from two departments closely involved in formulating a new policy on emissions. Christine Loh is under secretary for the environment, while Joseph Lai is permanent secretary for transport and housing (transport). They gave a clear overview of the way the Hong kong Special Administrative Region is tackling the task of reducing emissions from one of the world’s busiest container ports. Later on, Arthur Bowring, managing director of the Hong kong Shipowners Association, caught delegates’ attention when he explained that ship operators themselves had led moves to introduce emissions-reducing measures. during the well-attended Thursday morning session, chief executive Peter Hall outlined a proposed business plan, aimed at: enhancing IBIA’s global identity; running dynamic regional forums; growing membership; increasing the body’s ability to influence policy; establishing training standards and becoming the point of reference for the bunkering industry. IBIA chairman Simon Neo closed the organisation’s 2013 convention in Hong kong, saying that the event had been an “outstanding success” and inviting delegates to next year’s convention in Hamburg. More in-depth reports on the presentations will be featured in the spring issue of World Bunkering. The excellent photos are courtesy of IBIA board member Nigel draffin.

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Review: IBIA convention Hong Kong

Taking IBIA forward

Lion dancers provided a stunning finalé to the 2013 convention

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Review: IBIA convention Hong Kong

Christine Loh, keynote speaker and under-secretary for the environment, HKSAR government

Joseph Lai, permanent secretary for transport and housing (transport), HKSAR government

Robin Meech, convention chairman, Marine & Energy Consulting

Simon Neo, IBIA chairman

Peter Hall, IBIA chief executive

Mark Lewis, managing director, FGE London, and group vice-chairman

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Tim Wilkins, regional manager Asia-Pacific/ senior manager, environment, INTERTANKO

Arthur Bowring, managing director, Hong Kong Shipowners Association

Review: IBIA convention Hong Kong

Trevor Harrison, maritime arbitrator and mediator

Those delegates lucky enough to be able stay in Hong Kong on Thursday afternoon enjoyed a unique view of the harbour on board a replica of HMS Bounty

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Review LISW

Bunkers matter Marine fuel and emissions issues feature prominently in the first London International Shipping Week, held in September

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hile London International Shipping Week (LISW) initially appeared to be a bringing together of conferences and similar events that take place in London anyway, it became apparent from the first day that LISW was going to be more than just the sum of its constituent parts. There were many marine-related events of various sorts taking place right across the uk capital and there was certainly a real buzz as shipping people from around the world descended on London. The focus on the maritime sector was used to draw attention to major political issues, with the uk government publicly backing calls for a swift start and completion of an International Maritime Organization (IMO) review of the availability of 0.50% sulphur fuel once that becomes the global limit, outside designated emission control areas (ECAs), rising from the current 3.50%. The IMO regulation (Marpol Annexe VI) stipulates a 1 January 2020 start to the 0.50% rule, but this could be extended to 2025, subject to the outcome of the availability study. As part of LISW, the secretarygeneral of the IMO, koji Sekimizu, and shipping minister Stephen Hammond hosted an event to meet representatives of maritime nations and international

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industry associations. The hosts stressed the importance of dispelling the uncertainty that surrounds the review’s start date and highlighted a way forward. Hammond said that the review should start at the earliest realistic date consistent with adequate information being practically available, which the uk considered to be January 2015. Sekimizu said: “The IMO has set a goal for sulphur regulations in 2008 and the current global target is set for 2020. It is important for the IMO to act now to have a clear picture on the availability of the required quantity of low-sulphur fuel as soon as possible. Annex VI stipulates that the review must be completed by 2018, but there is nothing to say that it cannot be completed earlier. Indeed, there is a strong argument that early completion of the review of the availability of low sulphur fuel will give more time for all concerned, including the refinery industry, to take the necessary action and react in time to meet the requirements if such a need is identified.” Hammond said that the uk plans to submit a paper on the subject for the consideration of the next session of the IMO’s Marine Environment Protection Committee in the spring. david Balston, director of safety and environment at the uk Chamber of Shipping, issued a statement welcoming the proposal to bring forward the start date of the IMO’s fuel availability study.

He said: “The sooner it can start, the sooner the shipping and refining industries will have the certainty required to plan investment for the future. Given the time required for refiners to build new plant to meet the expected demand, then, ideally, the study should have started already, but 2015 is preferable to 2017.” In another policy-related move, government ministers and industry leaders met at number 10 downing Street for a meeting to decide how best to maintain Britain’s competitive position in the global maritime industry. The round-table meeting was attended by senior figures from top global shipping companies and focused on the elements required to boost the uk’s reputation as a leading maritime services centre. Transport secretary Patrick McLoughlin said: “This is an industry with a natural home in the uk and London is the centre of the world for the professional, business and financial services that keep ships sailing.” McLoughlin used the first day of LISW to announce a boost for the government’s Support for Maritime Training (SMarT) programme, which will receive an extra £3 million per year in addition to its original £12 million per year budget. This bonus will support an additional 200 trainees each year. Commenting on the SMarT funding increase, kenneth MacLeod, president

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the association, the IBIA organised a seminar for about 80 shipowners and bunker industry professionals. They packed into the Baltic Exchange to hear presentations on the broad theme ‘Asian growth: global recovery? How should London respond to the challenge?’. The event was sponsored by the Gibraltar Port Authority and the Gibraltar Register and introduced by Hall. Balston answered the question, ‘What are the major challenges facing uk shipping?’. Nigel draffin, the IBIA’s immediate past chairman, outlined how the association saw the future, while Hugh McLeod, chairman of Stirling Assynt (Europe), gave a presentation on ‘Managing risk in new markets’. Balston covered the threats to London and the uk’s pivotal position in global shipping and noted the government measures to support the country’s shipping industry, including an increase to funding available for cadet training. McLeod’s presentation was thought-provoking and mainly focused on the Syrian civil war and on the complex underlying ethnic rivalries. His insightful analysis came at crucial points in developments in both the Syrian and Egyptian crises. He emphasised the need to have good information about markets before making the decision to enter them. While his fellow speakers concentrated on London-specific and highly topical political issues respectively, draffin spoke very much on bunkering

issues, principally with an overview of the alternatives to heavy fuel oil available to the industry. He highlighted the difficulties in producing sufficient distillate to meet demand once the global 0.5% limit came into effect. The implications of trying to increase distillate production were substantial and complex, he warned. In his review of alternatives, draffin noted the advantages of using scrubbers, once remaining technical issues had been resolved. distillate availability will be no problem in 2015, when the ECA 0.10% sulphur limit comes into effect, according to draffin. He warned, however, that there would be a “big problem” with the 2020 global reduction to 0.5% sulphur. draffin stressed that the IBIA will continue to lobby regulators to set achievable ship fuel sulphur targets. Looking at how the shipping industry is reacting to environmental legislative changes, he said: “Buyers will take the least-cost route and suppliers will only respond to demand. Port authorities will look for competitive advantage, while laboratories and surveyors will have to learn new skills. The IBIA will continue to lobby and persuade regulators to set achievable targets and give us flexibility in how we meet those targets.” According to the IBIA, bunker fuel growth looks set to grow at about 1.5% per annum as China, Hong kong and other Asian countries continue their growth in marine fuel sales. While Singapore remains dominant in the supply of bunkers, other Asian countries are eating into its market share. However, bunker quality remains a big issue as suppliers look to reduce costs. draffin predicted that all bunker growth will be in Asia, the Middle East and Africa, while sales in the Mediterranean, Europe and South America will be flat and those in North America will shrink. London and the uk have seen a drop in the number of bunker brokers based there, but the former IBIA chairman noted that the city “remains the powerhouse of international shipping commerce, with an unrivalled core of technical, legal and commercial shipping expertise”.

Review LISW

of the uk Chamber of Shipping, said: “This is a clear vote of confidence from government on the ability of the maritime sector to create uk jobs. The wider maritime sector supports 263,000 jobs and uk employment has grown 6 per cent since 2009. I started my career as a junior rating on a ship’s galley and I know first-hand that giving young people more opportunities to work at sea is vital to the continuing success of our maritime economy. As a result of today’s announcement, more young people will have the chance to follow in my footsteps and build a career in global trade. Trade organisation Maritime uk also marked the occasion with the publication of a survey, in which 85 per cent of the 175 senior shipping executives questioned agreed that the uk is a globally competitive place to do business and 74 per cent said that the uk maritime sector will grow over the next five years. The most common reasons given for this confidence were the uk’s profound experience in legal insurance and financial services for the maritime industry and the breadth of established and reputable maritime services available in London. The International Bunker Industry Association (IBIA) was also significantly involved in LISW and the associated policy meetings, with chief executive Peter Hall attending the IMO meeting. In addition, in a new move for

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Company news

YugBunkerService With its own storage and loading terminals and 13 bunkering barges, YugBunkerService is one of the leading fuel providers in southern Russia

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ugBunkerService is a rapidly developing group of companies providing bunker services at the ports of the Black and Azov sea, and at the number of internal and river ports in Russia. The group supplies a full line of top-grade marine fuels (a wide range of IFO and MGO) and engine oils to sea-going and river vessels. yugBunkerService has been in bunkering for 17 years. Since launching our business in 1996, our priority has always been to meet and satisfy the requirements of our clients, providing superb service and high-quality fuel products at fair price. years of hard work in the field have given us invaluable experience and the opportunity to establish a well-developed infrastructure for delivery, storage and bunkering of marine fuel. As a result, we have grown to become one of the leading fuel providers in southern Russia. Having our own marine storage and loading terminals, plus a fleet of 13 vessels with deadweight ranging from 200 to 5,700 MT, we are flexible and capable of coping with the demands of all our clients, from small independent carriers to large shipping lines. Being one of the biggest and most reputable bunker companies in the regional market, yugBunkerService has long-term and mutually beneficial relationships with large Russian, Turkish, ukrainian and Greek shipping companies, as well as with a number of bunker traders operating at the Black and Azov sea.

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yugBunkerService is a member of the Russian Association of Marine and River Bunker Suppliers, and of the International Bunker Industry Association. Recently we expanded the number of ports that we service at and currently we are operating bunker deliveries at the ports of Rostov-on-don, Azov, Taganrog, yeisk, kavkaz, Temryuk, Taman, Saratov, Syzran, Samara, Volgograd and Astrakhan.

Our team is pleased to offer you our experience and knowledge, best prices and an excellent service on a 24/7 basis. ⏏

key information • Offices in Rostov-on-don, Taganrog,

yeisk and the port of kavkaz • Fleet of 13 own bunkering barges complying

with loading and supply regulations • Our own storage facilities, giving flexible

bunker delivery options • Our own terminal at the port Temryuk,

providing safe fuel loading on tankers of up to 5000 dWTs • Fuel deliveries compliant with MARPOL and SOLAS regulations. Our competitive advantages • Wide range of top-grade marine fuels

For more information, contact: rostov-on-Don tel: +7 (863) 242-44-86 +7 (863) 242-44-87 +7 (863) 242-44-88 E-mail: rostov@ybunker.com

from leading Russian oil refineries • Well-developed and extensive supply

network; • Best prices for our clients • Equal high-quality services at all our ports

of delivery • Widespread compliance of our barges and loading facilities with all legal and environmental requirements.

Yeisk tel: +7 (86132) 2-60-64 E-mail: yeisk@ybunker.com Port kavkaz tel: + 7 (86148) 4-43-47 E-mail: kavkaz@ybunker.com Website: www.ybunker.com

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Company news

jSC Bunker Company JSC Bunker Company is the most experienced physical bunker supplier in the north of Russia

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he company has been operating in the market for more than 17 years and has a well established logistics and technological scheme, which meets the increasing demands of the contemporary market and is rapidly integrating into the north and far north of Russia. JSC Bunker Company started as a bunker supplier at local ports on the White Sea – Arkhangelsk, Murmansk, Onega, kandlaksha – while our activity now covers such regions as Naryan-Mar, the Barents Sea, Varandey, Baydaratskaya Bay, Obskaya Bay and Sabetta. At present, we are strengthening our infrastructure and investing intensively in new technologies to meet tomorrow’s opportunities and challenges. For several years now, JSC Bunker Company has been awarded sophisticated projects that are very specific in their nature, owing to the climatic peculiarities of working in the northern region. As part of its complex approach, it has been providing additional services along with bunker supply, including storage and transportation of

bunker oil, food delivery and removal of bilge water. Being an independent company with its own fleet and carefully selected team of qualified professionals, JSC Bunker Company has everything to provide guaranteed quality of both bunkered products and bunkering service. All supplied bunkers observe the ISO8217 specifications and are controlled and guaranteed by our own certified laboratory. The delivery involves sampling, witnessing and all necessary checks at all stages of bunkering. Our regular clients include leading shipping companies in the north of Russia, dredging companies and international ship operators and brokers. We are able to offer you a warm welcome to bunkering in the north of Russia 365 days a year and 24 hours a day. ⏏

JSC BUNKER C O M PA N Y trader sales department jSC Bunker Company tel: +7 (8182) 65-77-93 Fax: +7 (8182) 42-03-27 Mob: +7-921-472-6776 E-mail: trader@jsbunker.ru

AMk group of Companies Trading and transportation of oil products

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ne of the biggest companies on kolskiy Peninsula, AMk Group was founded in May 2004. Its main activities are trading and transportation of oil products such as: • diesel • Fuel oil IFO-380 • Petrol (all types) • Fuel oil IFO-180 • Fuel oil M-100 • Fuel oil IFO-30 AMk Group consists of several companies involved in different types of activities: bunkering; road transportation of fuel; utilisation of mixed oil products waste and bilge water. The company has loading facilities for anchored vessels or those on scientific explorations. One of the main areas of activity is bunkering of foreign and Russian vessels in Murmansk and other ports in the region and coastal shipping areas. The company’s fleet comprises tankers Lahta, Sever, Sosnovets, Polartank and don, capable of shipment of all types of oil products and bilge water, with capacity of up to 300 tons, as well as transportation of up to 3300 tons of dark oil products and diesel. The tankers can travel up World Bunkering Winter 2013

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to 20 miles offshore to bunker the vessels or travel to other ports. All tankers are staffed by highly trained specialists. The company’s transport facility comprises four petrol tank lorries with capacity ranging from 8m3 to 23m3 and four masut tank lorries with capacity ranging from 15m3 to 23m3. These vehicles transport all types of petrol, diesel and masut in Murmansk, Murmansk region and the Republic of karelia. The company has maintenance and repair facilities at the Murmansk Sea Fishing Port, which it uses to service its specialised equipment and provide repair services for other companies. In 2011, AMk added three more vessels to its fleet. Angrapa, Mirgorod and Ostrov, Anzer, Iney, Arabat, Briz are the newly purchased vessels, currently involved in the scientific exploration of Pechorsk Basin and Barents Sea aquatory. The fleet provides all-year-round monitoring of the local environment. In 2012, AMk started a new project “Offshore transshipment complex-2”. The facility was built in kolsk Bay near Mishukovo and is designed for the trans-shipment of

oil from vessel to vessel. Offshore transshipment of oil is very common worldwide due to its safety, environmental protection and high throughput capacity. It is also easy to manage and cost-effective. The complex works all year round, 24 hours a day. AMk Group’s operations are supported by a professional team of lawyers. The company welcomes co-operation in the transportation and trade of oil products with mutually beneficial partnerships. ⏏ For more information, contact: Alexander koltunov, Director roman Moliboga, Commercial Director Maksim Vorobyov, technical Director Iliya Moliboga, head of Bunkering Andrey Popov as a head of Offshore projects 86 Podgornaya Street, Office 413 Murmansk, russia 183038 tel/Fax: 007 (8152) 287828/287337/ 286028 E-mail: amkoil@mail.ru E-mail: amk_gk@mail.ru

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Company news

Scadar Ltd The oldest physical supplier at the port of Murmansk

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cadar Ltd is the oldest physical supplier at the port of Murmansk, established since 1998. For almost 15 years our business portfolio has covered activities in the shipping industries and offshore bunker supplies to drilling platforms and special vessels working in the North of Russia. Our experienced team is happy to provide our customers with competitive pricing, trade credit availability, logistical support, and fuel quality control. We are fully certified for international standard ISO-9001 to ensure safety in all bunkering procedures. Our company is environmentally friendly and all our tankers are fitted with an advanced clean-up system. Scadar Ltd has enjoyed long-terms relations with most of Russia’s oil major companies such as Lukoil, Rosneft and Gazpromneft, from whom we receive stable supplies throughout the year. With development of Arctic, our shipping activities have rapidly grown in the port of Murmansk; in order to meet new

requirements we have future plans to expand our tanker fleet. Our aim is to benefit our clients and help them to achieve more nautical miles per spent dollar. ⏏

Scadar Ltd tel: +7 8152 596 170 Fax: +7 8152 596179 E-mail: scadar@scadar.com Website: www.scadar.com Vladislav Boyarskiy Managing Director tel: +7 8152 596 173 E-mail: vb@scadar.com Boris Makarov Manager trading Department tel: +7 8152 596 171 E-mail: bm@scadar.com Ivan Lutkevitch Senior trader tel: +7 8152 596 171 E-mail: iil@scadar.com Olga Sudova Logistic Department tel: +7 8152 596171 E-mail: os@scadar.com

galp Energia group Portugal's premier supplier of fuel services

B

ased at Lisbon, Galp Energia Group, is able to offer fuel supply services to all ships visiting this warm and pleasant country. Galp Energia's professional bunkering team provides customers with high-quality fuels and services, as well as the highest safety standards in all its bunker activity. The company’s bunkering products fulfil the ISO 8217: 2010 specification in all grades. To help customers’ achieve environmental targets, the company can also supply low-sulphur fuels at several ports, with the port of Lisbon being the main port for low-sulphur fuel. By optimising its logistics resources and storage capabilities, Galp Energia is able to provide high-quality services and products, including a wide variety of marine distillates. It is Portugal's main bunker supplier and provides bunker services using its two barges, with capacities of 5,800 tonnes and 3,000 tonnes each. The 5,800 dwt double-hull barge, Bahia Tres, began operations in 2010 to support the company’s business in the ports of Sines and

78

WB Book Winter 2013.indb 78

Setúbal, meeting all the important aspects for safety and protecting the environment. It is equipped with anti-pollution measurers and is covered by European Maritime Safety Agency regulations in the Atlantic Ocean and Mediterranean Sea. Always aware that its customers’ main concern is product cost, the company offers competitive prices without compromising product or service quality. Visiting Portugal and being supplied by Galp Energia will always be a good decision for regular customers, used to working with a professional team. We are the only refinery in Portugal and operate refineries at Sines and Matosinhos. We have an extensive product range that includes gasoline, diesel fuel, jet fuel, fuel oil, LPG, bitumen and several aromatic products. Our refining business is responsible for the supply of oil products to our retail, wholesale and LPG marketing divisions, competitors and foreign customers, as well as for the operation of our refining and logistics assets.

We hold a significant position in the Portuguese crude oil products storage market. Our two refineries in Portugal together represent 20% of the Iberian refining capacity and collectively account for the majority of Portugal’s annual domestic petroleum product requirements. We are investing approximately €1.4bn to upgrade and improve the efficiency of our refineries, representing €1bn for Sines and €0.4bn for Matosinhos. ⏏

For more information, contact: galp Energia SA tel: +3512 1724 0637/654 Fax: +3512 1724 2957 E-mail: bunkers@galpenergia.com Web: www.galpenergia.com World Bunkering Winter 2013

25/11/2013 11:18


Company news

tranzit-DV 2nd International Economic Business Congress

T

he 2nd International Economic Business Congress was held on September 26, 2013 in HyuNdAy hotelâ&#x20AC;&#x2122;s business centre for the first time in modern Russian history, initiated by the business community for owners and managers of enterprises of the Far Eastern Federal district and Asian and Pacific countries. The Congress was organized by OOO PR-agency Babich and Associates. The main purpose of the congress was to coordinate and consolidate the efforts of the business community, academics, experts and government to create a favourable investment climate in the Far Eastern Federal district. The main objective of the organisers was to set the union on the same site of Russian and foreign businesses with scientists, experts and state agencies on issues of investment, innovation, economic and cultural cooperation. The presentation and discussion of investment and innovative projects of the participants were presented at the Congress. As a result, government and business representatives had opportunity to establish new business contacts and to find solutions for their projects. The Tranzit-dV, took part in a roundtable discussion at the Congress. The theme of the presentation was "Building a multi-modal production logistics system as a vector of economic development of the Far Eastern Federal district." According to the result the organizers will compose resolution, illustrating the main points of the potential growth of the Far Eastern region. Then it will be sent to the state executive. â??

Igor Polchenko, president, Tranzit-DV

For more information, contact: 13 uborevicha Street, Vladivostok, 690091, russia tel: +7 (423) 249-11-99 Fax: +7 (423) 248-11-28 E-mail: tranzit@tranzitdv.ru Website: www.eng.tranzitdv.ru

THE ONLY OFFICIAL MAGAZINE OF

World Bunkering Winter 2013

WB Book Winter 2013.indb 79

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25/11/2013 11:18


Company news

Forum Ltd. Providing direct access to high-quality fuel oil, 24/7

F

orum Ltd. supplies bunker fuels in the port of Saint-Petersburg. The company entered the market in 2011 and has proved to be a reliable supplier of bunker fuels, providing clients with fuel oil produced by Antipinsky refinery, an independent modern refinery with monthly production capacity of over 200 000 metric tons. Our main product is straight run fuel oil complying with ISO-F-RME, ISO-F-RMG and Regulations 14 (1) and 18 (1) of MARPOL 73/78, Annex VI. We supply MGO (dMA) 0,1% sulphur from the leading refineries in Russia as well. The company has several contracts with leading shipping companies to ensure smooth and secure supply. Product transshipment is carried out on the most up-to-date terminals of the region. Quality is the corner stone of bunker business, therefore, in collaboration with world-acknowledged surveying companies, we ensure the highest quality of the products we deliver. All our products are compliant with ISO 8217:2010(E) standard.

Since its beginnings of 2011, Forum has earned the trust of customers and partners by supplying high-quality products at competitive prices and on flexible payment terms. The company ensures a consistent supply of fuel oil, working on a contract basis as well as the spot market. We provide our services for a vast number of major companies in the shipping industry, as well as traders 24 hours a day, 7 days a week. ⏏ Our competitive advantages are: • direct access to high quality fuel oil; • products conform with ISO8217:2010 (E)

plus the later amendments; • 24/7 services;

For more information and bunker enquires please contact us at: Forum Ltd. Office 411, Barochnaya str. 10/1, St. Petersburg, 197110, russia Bunker trader: Aleksey Miloradov Phone: +7 (812) 449-65-91 Mobile: +7 (921) 757-11-33 Yahoo ID: aleksey.miloradov E-mail: trade@forumbunkering.ru www.forumbunkering.ru

gazpromneft Marine Bunker Ltd Market leadership is our goal

G

Gazpromneft Marine Bunker, operator of Gasprom Neft’s bunker business, has made its second acquisition in the international marine fuel market (after Marine Bunker Balkan S.A. in Romania) with the purchase of Estonia-based AS Baltic Marine Bunker. The Estonian company manages a bunker vessel with a deadweight of 2.786 mt that can supply both dark and light marine fuels. The company is in charge for bunkering operations in the Baltic sea ports of Estonia. AS Baltic Marine Bunker has taken over the bunker business from NT Marine, the company which was well known in the bunker market. Gazpromneft Marine Bunker, which is already active in the Baltic bunker market, plans to sell at least 270,000 metric tons a year of marine fuel in Port of Tallinn. The fuel is originally from Gazprom Neft's refineries in Russia with the sulfur content of 1%. Gazpromneft Marine Bunker is a bunkering business operator of Russia’s 4th largest oil and gas company Gazprom Neft.

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The enterprise was founded in October 2007. It includes nine regional offices and four subsidiaries: Gazpromneft Shipping LLC, which operates the Company's own fleet of 8 fuelling vessels, Gazpromneft Terminal SPB LLC, which operates a bunker terminal in St. Petersburg; Marine Bunker Balkan S.A. (bunkering in the Black Sea port of Constanta), AS Baltic Marine Bunker (bunkering in the Baltic Sea port of Tallinn). Gazpromneft Marine Bunker is a leading operator in the Russian bunker market, with the widest geographical reach of any Russian bunker company. It operates at all major ports in Russia including 16 sea ports and 13 river ports. ⏏

gazpromneft Marine Bunker Ltd Bolshoy Prospect 80 block r, Vasilyevskiy ostrov, St-Petersburg, 199106, russia tel: +7 (812) 449-49-70 Fax: +7 (812) 449-46-28 E-mail: marinebunker@gazprom-neft.ru Website: www.gazprom-neft.ru

World Bunkering Winter 2013

25/11/2013 11:18


Your reliable partner for bunkering operations in West Africa

E

nacol is a reliable supplier of highquality marine fuels and lubricants ,based in Cape Verde. Strategically located at the crossroads of midAtlantic main shipping routes connecting European-African-American’s busiest ports, we offer a safe, efficient and secure bunker service to all type of vessels. Enacol can deliver MGO (dMA) max. 0.1 % sulphur and a full range of highsulphur fuel oil from IFO-30cst to IFO380cst, as well as high quality Lubmarine lubricants. All fuels are compliant with Regulations 14 and 18 of Annex VI of MARPOL 73/78 and fulfil ISO 8217: 2010 specifications. Enacol is based mainly in the Port of Mindelo (Porto Grande), where we have our storage facilities and the centre of our logistical operations. In this port, located in the island of São Vicente, within a semicircular natural bay we can deliver by barge, truck or ex-pipe. Enacol also owns a supply station at Marina do Mindelo that supplies yachts and other recreational vessels.

Porto Grande offers perfect conditions for a safe, efficient and secure bunker operation – there are no piracy incidents in Cape Verdean seas. There is direct access for any type of vessel, assured 24/7 mooring services, competitive harbour rates and tariffs, no congestion and good weather conditions. Enacol operates two barges – dragoeiro and Baía – to fulfill our clients need for a quick turnaround operation. M/T dragoeiro has a load capacity of 700m3 of MGO and a pumping capacity of 200m 3/h, while M/T Baía has a combined load capacity of 281.9m3 of MGO and 743.9m3 of fuel oil. Our barges are equipped with Coriolis mass flow meters to ensure delivery of exact quantities, enhanced transparency, improved efficiency and cost effectiveness. The use of the mass flow metering system is an important step towards a more efficient and transparent bunker delivery process and the bunkering industry in Cape Verde.

Our company has plenty of experience in the region with a professional trading team available 24 hours a day, seven days a week to deliver high-quality services and products in a totally secure environment. We look forward to your bunker enquiries and hope to do business with you soon. ⏏

Company news

ENACOL– CAPE VErDE

For more information, contact: P. BOX 1, S.Vicente – Cape Verde tel: (+238) 230 60 80 Fax: (+238) 232 34 25 Mobile: +238 9534354 E-mail: bunker@enacol.cv energia@enacol.cv Website: www.enacol.cv www.enacolbunkering.com

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15:10

editorial and production team.

www.mar-media.com

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IN ASSOCIATION WITH

HOSTED BY

DIAMOND SPONSOR

SUPPORTED BY

LNG Ship Fuel Technology Presented by Lloyd’s Register, the LNG Ship Fuel Technology focus will take place on Tuesday 25 March 2014 at KINTEX1, Korea.

Showcasing Technical Innovation and Excellence in LNG as a Shipping Fuel Gastech 2014’s LNG Ship Fuel Technology focus will offer an invaluable opportunity for showcasing: Technological innovation

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Stand out from your competitors with unique branding opportunities. Contact marketing@gastech.co.uk for further information

Seize business & branding opportunities!

Sponsors who have confirmed participation for 2014's exhibition include:

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SPECIAl FEATUrES: Traders How are traders adapting to an increasingly complex market?

Next issue

WORLD BUNKERING SPrING 2014 ISSUE

Fuel Quantity Will other ports follow Singapore's example and swithc to flowmeters. Are bunker surveyors' days numbered? IT A look at the latest developments in Information Technology and their effects on the bunkering world.

GEoGrAPHICAl FoCUS Northern Europe We take a look an increasingly stringent regualtory environment, with Netherlands authorities regarding off-spec bunkers as â&#x20AC;&#x153;wastesâ&#x20AC;? while France has announced unliateral CO2 reporting requiremnts. Indian Subcontinent Our survey of developments in Bangladesh, India, Pakistan and Sri Lanka. UAE Dubai strengthens its role as a trading hub while Fujairah continue to invest in infratstructure. russian Update News, Views, Analysis rEGUlAr FEATUrES Interview, Industry News, Environment, Testing, Risk Management, Innovation, Legal News, Equipment and Services, Diary

w w w.wor wor l dbu nke r i ng.c om World Bunkering Winter 2013

WB Book Winter 2013.indb 83

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Diary

4-5 december 2013 PlAttS 2nD AnnuAl MEDItERRAnEAn BunkER fuEl COnfEREnCE Platts 2nd Annual Mediterranean Bunker Fuel 2013 conference will provide those in the industry with an opportunity to discuss and acquire solutions to challenges including the expense of burning higher specification and more environmentally friendly fuels, complying with industry standards and emissions targets, fleet conversions, and dealing with decreased profit margins.

24-27 March 2014 GAStECH 2014 Hear from a wealth of leading technical and commercial speakers delivering ground-breaking new project presentations selected by the Gastech Governing Body from over 500 submissions made by the international gas community www.gastechkorea.com

www.platts.com/conferencedetail/2013/pc351/index

26-27 March 2014 9tH MARItIME COMMunICAtIOnS & tECHnOlOGIES SuMMIt

10-11 december 2013 DESIGn Of lnG fuEllED VESSElS SEMInAR 2013

ACIâ&#x20AC;&#x2122;s 9th Maritime Communications & Technologies Summit taking place on the 26th & 27th March 2014 in London will focus on crew development and explore how they are adapting to new technologies. www.wplgroup.com/aci/conferences/eu-mct9.asp

Analyse the technical, safety and space implications of constructing and converting ships to LNG propulsion www.lloydsmaritimeacademy.com/FKT2598WBULL

2-4 April 2014 35tH IntERnAtIOnAl BunkER COnfEREnCE

Where experts from around the world speak on the many issues that will shape the future of the maritime industry.

The 35th International Bunker Conference (IBC) is organized by BI Norwegian Business School, whose purpose is education and research. The school regularly organizes non-degree seminars and conferences intending to provide an interface between the academic world and the various businesses and industries. This enhances focus on research as well as it brings knowledge of both worlds back to the participating parties.

www.shipping2014.com

www.bi.edu/ibc

17-19 March 2014 SHIPPInG 2014

9-11 April 2014 SEA JAPAn 2014

19-21 March 2014 ASIA PACIfIC MARItIME 2014 The 13th Edition of Asia's Biggest Maritime Event will be happening from 19 - 21 March 2014. www.apmaritime.com

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WB Book Winter 2013.indb 84

Over the past several years Japanese ship owners, ship builders and marine equipment manufacturers have ridden out a 'perfect storm' caused by a fiercely strong yen, intense international competition and unfavorable economic conditions. The result is that they are now leaner, fitter and stronger than ever before. www.seajapan.ne.jp

World Bunkering Winer 2013

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• • • •

• • •

HIGH qUALITy ISO 8217-2010 BUNKER FUEL qUALITy CONTROL FROM OIL REFINERy PLANT TO END USER FLExIBLE PRICES MAIn SEA PORtS Of OPERAtIOnS: Vladivostok, Nakhodka, Vostochniy, Kozmino, Zarubino, Novorossiysk, Tuapse, Taman, port of Caucasus, St.Petersburg, Ust-Luga, Primorsk, Kaliningrad, Baltiysk, Murmansk, Arkhangelsk MAIn RIVER PORtS Of OPERAtIOnS: Astrakhan, Azov, Cherepovets, Kazan, Nizhnekamsk, Roston-on-Don, Samara, Ust-Kut, Volgograd, yaroslavl IntERnAtIOnAl PORtS: Constanta, Klaipeda, Riga, Tallinn tHE SuBSIDIARIES: Gazpromneft Shipping, Gazpromneft Terminal SPb, Gazpromneft Marine Bunker Balkan S.A., AS Baltic Marine Bunker REGIOnAl OffICES: Azov, Arkhangelsk, Kaliningrad, Murmansk, Novorossiysk, St. Petersburg, Tuapse, yaroslavl, Vladivostok

WB Book Winter 2013.indb 1

GAZPROMNEFT MARINE BUNKER Bolshoy Prospect 80 block R, Vasilyevskiy ostrov, St-Petersburg, 199106, Russia Tel: +7 (812) 449-49-70 Fax: +7 (812) 449-46-28 E-mail: marinebunker@gazprom-neft.ru

www.gazprom-neft.ru

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