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Full range of premium quality bunker fuel For every type of engine Fuel oil compliant with ISO 8217:2010 Client-oriented service and flexible schemes of cooperation Own bunkering fleet
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Editor’s letter 2013 has already seen a number of big changes to the shipping and bunkering industry so there’s a lot to pack into our latest issue
he old Chinese curse runs “May you live in interesting times.” Well, cursed or blessed, the bunkering industry is certainly living through interesting times. This current issue reflects, yet again, the rapid pace of change in shipping and bunkering. Not so long ago, the industry was mainly concerned about quantity and quality issues. They are still important, but have been given new twists by the overarching changes that are in train. The quantity issue, driven by bunker prices unthinkable a few years ago, has become focussed on mass flowmeters. In our surveyors feature, we ask two major players whether surveyors will be routinely used when barges are equipped with mass flowmeters. The answer appears to be: “Yes, but they will be doing something a bit different”. And there’s quality. Here things are getting more complicated. For various reasons, different new substances are finding their way into marine fuel. In our Testing slot, DNVPS notes that: “operational challenges are exacerbated by the blending of unconventional components by bunker fuel suppliers to meet stringent sulphur regulatory requirements within the emission control areas (ECAs)”. Returning to the big underlying changes, much of this issue is either looking at ways to respond to the impending 0.10% sulphur limit in ECAs or to reduce/improve fuel efficiency – in response to price and the need to reduce shipping’s carbon footprint. On the latter motive, European Environment Agency Director Jacqueline McGlade managed to upset the shipping community by saying: “We need initiatives that protect the environment as an overall system. The choice between either clean air or mitigating climate change is a false dichotomy Europe needs both. By avoiding unnecessary movement of goods and improving transport efficiency, we can address both air pollution and greenhouse gas mitigation together.” The phrase “avoiding unnecessary movement of goods” rang alarm bells in high places. Our Environment pages report on the shipping industry’s response to McGlade as well as giving an overview of what is going on in the politically charged debates on the environment. We also look in depth at the option of using liquid natural gas (LNG) as fuel. As Deputy Editor Sandra Speares reports, there is a lot of work going on in this field. But she also notes some cautionary voices, with for example John Stirling, quality manager for World Fuel Services, calling on the industry to stop and think before going ahead with plans to use LNG as a fuel for ocean-going vessels. The alternative of installing abatement technology and continuing to use heavy fuel oil does appear to be gaining momentum, again something we refer to on the Environment pages. However those who do wish to further explore the possibilities of LNG will find our preview of the LNG Bunkering Conference in Singapore useful. LNG also features prominently in the Australia report while our other geographical feature looks at the Mediterranean, an area affected both by the Eurozone’s problems and by the need to supply ECA compliant fuel. So, all in all, once again there is a lot going on and World Bunkering is keeping its readers up to date. Oh and by the way, the IBIA Convention in Hong Kong is listed in our Diary, so it’s time for it to go in yours too!
World Bunkering Summer 2013
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Bunkering Publisher: W H Robinson Editor: David Hughes (firstname.lastname@example.org) Deputy Editor: Sandra Speares (email@example.com) Head of Maritime Publications: Taj Oberai (firstname.lastname@example.org) Project Manager: Dawn Barley (email@example.com) Project Consultant: Alex Corboude (firstname.lastname@example.org) Designer: Justin Ives (www.justindesign.co.uk)
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.
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Bunkering IBIA reports Editor’s letter 1 Chairman’s introduction 7 Chief Executive’s report 9 IBIA Annual dinner 10 New members 14 Noticeboard 16 Membership application 17 7
Industry news Environment Interview Oil majors Fuel management Surveyors LNG Testing Risk management
Mediterranean focus Overview 42 Turkey 45 Strait of Gilbraltar 48 Greece 53 Australia
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Special features 19 22 26 28 31 34 36 39 40
geographical focus 55
Innovation Legal news Equipment and services Review: Fujcon Preview: Istanbul Bunker Conference Preview: Bunkering in Asia Preview: LNG Bunkering
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‘The transition has been seamless’
hen I agreed to stand for election as vice-chairman last year, I little expected that between then and now we would see the appointment of not one but two chief executives and the appointment of a new events and membership manager. Given that the IBIA Secretariat has a total complement of only four staff, that is a significant turnover! However, any concerns I might have had have proved to be groundless; all the transitions have been amicable and seamless and it continues to be a case of both business as usual and onwards and upwards for IBIA from every perspective. My first and most welcome task as chairman was to welcome Captain Peter Hall, our new chief executive, to Singapore in early April, less than a week after he took up his appointment. As a native Singaporean you will, I hope, forgive me for saying that Peter could not have made a better choice about where to start his work with IBIA than in the world’s largest bunkering location. We had a full and highly constructive week, including meetings with the Maritime and Port Authority of Singapore (MPA), the IBIA Asia Branch ExCo and plenty of one-to-one time where we could discuss as chairman and CEO our ambitions for IBIA over the next year and into the future. I am looking forward to working closely with Peter over the remainder of my term of office. Over the past year, IBIA has had the privilege of being led by Nigel Draffin as chairman and I freely acknowledge that he will be a hard act to follow. Nigel is a natural and gifted teacher, an accomplished speaker and one of those rare characters who really would love you to know as much as he knows and, if you had time to listen (which would be a very long time indeed in matters marine and technical), he would tell it all to you! His contribution to IBIA began at its foundation over 20 years ago and he has not stopped since, giving generously of his time and talents. I and my fellow board members are deeply grateful to Nigel for all he does for IBIA – long may it continue. IBIA’s activities in the Asia region have continued to be led enthusiastically and successfully by the IBIA Asia Branch supported by IBIA (Asia)’s Regional Manager, Kwok Fook Sing. Both the Secretariat and the branch ExCo have contributed to the strength of IBIA in the Asia
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region and I must express my gratitude to them all for the good work they do. I must also pay tribute to Chong Kam Wah, without whose efforts and influence over the past few years IBIA’s presence in Asia would be a shadow of itself. Since retiring officially from IBIA, Kam Wah has continued to advise and assist us in his role as a director of IBIA (Asia), something that we value greatly. However, all good things must come to an end and Kam Wah has told us that he intends to stand down later this year and spend more time tending his roses. All I can say is that, on the basis of our experience, they will be very well-tended roses indeed. Sticking with the Asia theme, I am also looking forward very much to our Annual Convention in Hong Kong on 5-7 November; it promises to be an informative and enjoyable event in one of the liveliest spots in the whole of Asia. As always, the convention strives to provide a combination of high quality speakers and excellent networking events at an affordable cost, even for the most budget-conscious members. Unlike most events related to bunkers and bunkering, the IBIA Convention is not run by a commercial organisation with a target audience of anyone with a credit card; it is an event planned by members for members and the consistently positive feedback we have received in previous years suggests that the formula is about right. Finally, later this year we will be inviting nominations for the election of next year’s new intake of directors. Nominations are welcome from all eligible members but we are particularly keen to strengthen our board level representation from the Americas, the Asia-Pacific region, Africa and the Middle East; that is a polite way of expressing the view that as a board, we are still over-representative of northern Europe with six of the 11 present directors coming from this area. Might you be willing to put your name forward? If you are thinking about it, please do not hesitate to contact me for a confidential no-obligation chat. Simon Neo Neo Tiau gee Chairman, IBIA
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Chief executive’s message
IBIA - an international team making a difference
ello, Hola, Bonjour, Namaste, 你好 (néih hóu), Ohaiyogozaimasu, Guten Tag, G’Day, Ola, Buon Giorno, Hej, Salda, Supa, Buen dia, Hailo, Ave, Hi, salaam aleikum. The danger of starting with such an introduction is that you miss someone out. So please let me know if I have not welcomed you in your mother tongue. The reason this matters is that I view each one of you as important to the industry regardless of whether you are a member or a potential member. With the association made up of almost 600 members across all the continents, it is truly an international family, with a wealth of experience and the potential to grow and do significantly more. As I take up this role with IBIA, we are going through our annual change of chairman; Nigel Draffin steps down as past Chairman taking up the role of Immediate Past chairman and Chair of the Board Development Committee and Simon Neo starts his term of office as chairman. Mustafa Muhtaroglu returns to the board after a period of absence – Mustafa was instrumental in establishing the Turkish Bunker Industry Association so provides a welcome strengthening of links with the eastern Mediterranean region. Bob Lintott steps down from the board, although I am sure Bob will continue to provide us with the benefit of his experience in the years to come. Although we have movement, we also have stability and growth. I have inherited strong foundations first with the secretariat in Chanette Roughton in the Southampton office and Kwok Fook Sing in the Singapore office. I also have a three-year business plan that Cliff Brand has crafted, which only remains to be refined and approved by the board. We also have a membership survey that was carried out during the early part of this year, which provided a large amount of valuable information from and about members. Both these pieces of work I intend to draw heavily upon in formulating a way forward over the next few months as we settle into delivering value for money to the membership. At the end of April, Anna Trant joined IBIA as our new events and membership manager. Anna has spent the past three years running events for members of the Royal College of General Practitioner, and has also managed a variety of events from music and dance festivals to weddings. With an oil industry Master’s degree and 10 years of experience in oil and gas, she is
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looking forward to combining her event skills with her academic experience with a technical understanding of the bunker industry. A week after starting I was on a plane to Singapore to meet incoming Chairman Simon Neo, the IBIA (Asia) Branch Executive Committee (the ExCo), and other members in Singapore and, of course, Regional Manager, Kwok Fook Sing. We had a highly constructive and stimulating meeting with the Maritime and Port Authority (MPA), which spoke of innovative methods and continued progress on quality and quantity standards, looking to IBIA to support it in this effort and to develop ways of collecting worldwide technical data. I also attended Sea Asia 2013 and got a sense of the pulse of shipping in Asia, meeting many of the players in the region and listening to their hopes and concerns. Having spent a number of years in Gibraltar, I was already aware of some of the challenges facing the industry: the further reduction in 2015 of emission control area (ECA) SOx limits, fuel standards compliance, quality and quantity issues, rising cost of product, liquified natural gas (LNG) as a fuel, tight margins and the need to adapt and transform generally. Above all, there is a crucial need for reliable and impartial information about all aspects of bunkers and bunkering. We have a challenging, but exciting time ahead. I look forward to hearing more from you about how IBIA can continue to serve the bunker industry and meet the needs of you, the members.
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Whoâ€™s who? Can you put names to faces? If so you must be a real IBIA stalwart. See you at the next dinner!
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World Bunkering Summer 2013
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New members CORPORATE
A.MATEOS & SONS LTD PO S&D Gavin Cavaco Unit 2, Ground Floor Candytuft House Waterport Terraces Gibraltar GX11 1AA Gibraltar E-mail: firstname.lastname@example.org
ALfASHIP INTERNATIONAL SA SERVICE Antonio Castaneda Leon yCastillo Str. 367 1F Edificio Ballesmen Las Palmas de Gran Canaria 35006 Spain E-mail: email@example.com
ARgO S.A. gREEk OIL COMPANy BUNKER SUPPLIER Michael Psarompas Eleftherias Square Kalymnos Island Dodecanese 85200 Greece E-mail: firstname.lastname@example.org
BERLIAN PERSADA PRATAMA PT BUNKER SUPPLIER Miko Pranato Pasar Kembang Street No. 115 Surabaya 60263 East Java, Indonesia E-mail: email@example.com
BuNkER-SERvIS LLC BUNKER SUPPLIER Andrey Ulasowitch Bolshoi Prospect V.O. 44 “B” of 1N St. Petersurg 199004 Russia E-mail: firstname.lastname@example.org
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OON & BAzuL LLP
BUYER Joost Zuiddam Admiraal de Ruyterstraat 33 Shiedam 3115 HA The Netherlands E-mail: email@example.com
SERVICE Kelly Yap 36 Robinson Road #08-01/06 City House Singapore 68877 Singapore E-mail: firstname.lastname@example.org
LEkEREN INTERNATIONAL LTD BUNKER TRADER Eftihia Kalaitzis 21-23 Lazaraki Street Glyfada 16673 Greece E-mail: email@example.com
OCEANCONNECT MARINE uk LTD BUNKER TRADER Bill Wakeling The Old Trading House 15 Northburgh Street 3rd Floor London EC1V 0JR UK E-mail: Bwakeling@oceanconnectmarine. com
OLAM INTERNATIONAL BUYER Bianca Knight Glass House Office Park Building No. 3 Umhlanga Rocks Drive Umhlanga 4051 South Africa E-mail: firstname.lastname@example.org
PAN EuROPEAN SHIPPINg & AgENCy SERvICES LTD BUNKER TRADER Ana Gavriusina 22 Billet Street Taunton Somerset TA1 3NG UK E-mail: email@example.com
PANOIL PETROLEuM PTE LTD BUNKER SUPPLIER Joe Lim 60 Albert Street OG Albert Complex #13-07/08 189969 Singapore E-mail: firstname.lastname@example.org
PLAzA MARINE INC. BUNKER BROKER Peter Proscia 370 West Pleasantview Avenue #341 Hackensack 7601 USA E-mail: email@example.com
SCADAR BUNKER SUPPLIER Ivan Lyutkevitch 17 Sofiya Perovskaya Str. Murmansk 183016 Russia E-mail: firstname.lastname@example.org
World Bunkering Summer 2013
New members SINANJu TANkERS PTE LTD BUYER Ju Kai Meng 61 Alexandra Terrace 07-01 Harbour Link Complex Singapore 119936 Singapore email@example.com
vAMSEE SHIPPINg CARRIER PRIvATE LTD BUNKER SUPPLIER J. Ramesh Chowdary A-10, 2nd Avenue Annanagar Chennai Tamilnadu India 600102 Email: firstname.lastname@example.org
ALExEy STAkANOv BUNKER SUPPLIER Global Bunkering Ltd Amathounos Ave. 202 Marina Gardens, Block B, Office 13 Limassol 4533 Cyprus E-mail: email@example.com
CALvIN CHuNg BUNKER SUPPLIER Chimbusco Pan Nation Petro-Chemical Co. Ltd 9/F Luk Kwok Centre 72 Gloucester Road Wanchai Hong Kong E-mail: firstname.lastname@example.org
gORDON vAN DER BRuggE CORPORATE ADDITIONAL
EAST EuRO SHIPPINg LTD BUNKER TRADER Unit 1010, Miramar Tower 132 Nathan Road Kowloon Hong Kong China E-mail: email@example.com
EuRO BuNkERINg SERvICE Ou BUNKER TRADER Harju Maakond Saku Vald Manniku Kula Trapi Poik 17 75511 Estonia E-mail: firstname.lastname@example.org
uNICORN CALuLO BuNkER SERvICES (PTy) LTD BUYER Russell Burns 5th Floor, Grindrod Mews 106 Margaret Mncadi Ave. Durban 4001 South Africa E-mail: email@example.com
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BUNKER BUYER Flinter Shipping BV P.O. Box 349 Barendrecht 2990 AH The Netherlands E-mail: firstname.lastname@example.org
HELENA vALLIADES BUNKER TRADER Zeba Marine New Broad St. House 35 New Broad Street London EC2M 1NH UK E-mail: email@example.com
JEROME BERAuLT BUNKER BROKER Copemer Tour CMCI 2 Rue Henri Barbusse Marseille Cedex 01 13241 France E-mail: firstname.lastname@example.org
kEvIN ALAMEDA BUNKER TRADER Clipper Oil 2040 Harbour Island Drive Suite 203 San Diego, CA 92101 USA E-mail: email@example.com
MATTHEW vALLINS BUYER Gearbulk (UK) Ltd 5 The Heights Weybridge, Surrey KT13 0NY UK E-mail: firstname.lastname@example.org
MIkHAIL RAyEv BUNKER TRADER Unigroup Marine Fuels Morskoy Slavy Square, 1 Office 5103 St. Petersburg 199106 Russia E-mail: email@example.com
OMOMIA ROBINSON BUNKER BROKER EcoTech & Surveys Ltd House One, ‘B’, 112 Road P.O. Box 3302 Festactown 234101 Lagos, Nigeria E-mail: firstname.lastname@example.org
PRADEEP kuMAR BUNKER TRADER Prime Resources Hamriya Freezone Sharjah UAE E-mail: email@example.com
WILLIAM PuAR SERVICE LA Singapore Bunker Surveyors Pte Ltd 29 Mandai Estate #06-03 Innovation Place Tower 3 729932 Singapore E-mail: firstname.lastname@example.org
yESIM SEkER BUNKER TRADER Zeos Shipping Agency Services & Petroleum Transport Trading Ltd Kosuyolu Mah. Cenap Sahabettin Sk No. 47 Kadikoy Istanbul 34718 Turkey E-mail: email@example.com
IBIA noticeboard Benefits to members as at 1 May 2013 MEMBERSHIP COSTS Individual membership: £150 Corporate membership: £700 Corporate additional membership: £150
These increases took effect on 1 July 2012 and in future there will be small annual increases. The Board has also decided that the present practice of listing Corporate Additional Members does not properly and fairly meet members’ needs and some changes have therefore been introduced that will more accurately match the benefits of membership to its cost; affected members will be contacted directly by the Secretariat. If you have any queries or comments about these changes, then please contact firstname.lastname@example.org or telephone: +44 (0) 20 3397 3850.
IBIA World Bunkering Magazine – discounts on advertising
Discounted advertising rates are available for members, representing savings of between £600-800 per advertisement, depending on the advertisement size. Please contact the Advertising Sales Team at Maritime Media London on + 44 (0)20 7386 6100
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If your details are not correct, please let the IBIA administration know at email@example.com. This publication is only available to members.
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 IBIA guide to In-Line Blending
Free bromide supplied for use by corporate members only.
Available free of charge to members IBIA PuBLICATIONS AND BENEfITS IBIA World Bunkering Magazine – free copies for Members of IBIA
IBIA guide to Avoiding and Resolving Bunker Disputes
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 members receive their personal copy free, but the report is offered for sale to non-members at £50.
Evaluate the Merits of a Bunker Claim
Interpretation of specifications for bunker fuels and a guide to the question of repeatability. For sale to non-members at £35.
IBIA glossary of Bunker and Lubricating Oil Terminology
A comprehensive guide to all those complicated terms that are in daily use in the bunkering industry. For sale to nonmembers at £45.
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World Bunkering Summer 2013
The International Bunker Industry Association THE AIMS Of THE ASSOCIATION • To provide an international forum to
address the concerns of all sectors of the bunker industry To improve and clarify industry practices and documentation To represent the industry in discussion with relevant governmental and nongovernmental bodies and to make the concerns of the industry known to such bodies To assist members in the event of disputes by identifying the options and exploring the alternatives open to them and eventually to provide a panel of experienced mediators and arbitrators To increase the professional understanding and competence of those working in the industry.
IN THE BEgINNINg
Eight members of the industry conceived the International Bunker Industry in October 1992, and the association was formally registered on 29 January 1993. Since then, it has expanded steadily with a worldwide membership comprising shipowners, charterers, bunker suppliers, traders, brokers, barging companies, storage companies, surveyors, port authorities, credit reporting companies, lawyers, P&I Clubs, equipment manufacturers, shipping journalists and marine consultants. In 2012, our membership stands at over 600 and is spread over 87 countries. There are three categories of membership, namely: • Individual membership: open to all people with an interest in bunkering, whether they are involved in the day-to-
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day business of bunkering ships or have an interest in the industry. Each member has one vote in association business, but this category does not allow delegation. • Corporate membership: open to companies and associations with an interest in bunkering, whether they are involved in the day-to-day business of bunkering ships or have an interest in the industry. Each member has one vote in association business, but corporate membership has the advantage of allowing companies to delegate different members of their company to participate in different working groups. • Corporate sponsor: this is the newest category and allows a company to contribute any sum they see fit to the association. In return they receive the same benefits as a corporate member but in addition have their logo printed on all IBIA publications and are offered further sponsorship opportunities ahead of other members.
groups and committees that report to the Board. Areas covered have included: • Education • Safety • Technical • Environmental • Commercial • Dispute Resolution • Blending The Board and the Secretariat welcome expressions of interest from members to participate in the activities of working groups and committees, and invite suggestions and proposals for further areas of engagement and research.
The board is constrained to have a balance of members from each sector of the industry in order to preserve the industry-wide representation and approach of the association. The board regulates the association and is elected by the membership to perform that role. WORkINg gROuPS AND COMMITTEES
IBIA is an association dedicated to its membership and strives to reflect members’ wishes and react to their needs. This is achieved in part by the formation of working
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Global round-up Much of the HSfO market “to disappear”
Fereidun Fesharaki, chairman of FACTS Global Energy (FGE) told the 8th International Fujairah Bunkering and Fuel oil Conference (Fujcon) that the low sulphur premium was at historically high levels and that the impact of International Maritime Organization (IMO) regulations will result in major dislocation in the early 2020s as much of the high sulphur fuel oil (HSFO) market disappears. The development of shale gas, and associated oil, by initially the US, is leading to an LNG “revolution” according to Dr Fesharaki. He said that oil supply has been boosted by shale gas related liquids, Canadian heavy oil and continued expansion of Iraqi production. He added that the price of crude was likely to gradually drop to about US$100 a barrel by the end 2013, from a current level of about $105. However the increasing amounts of shale-sourced liquified natutal gas (LNG) and condensate would lead to a further slide to between $90 and $80 by 2015. He said that sort of level would be maintained for “a number of years” but he did not think the price would drop below $80. The price drop would not, according to Dr Fesharaki, cause problems for the oil industry as, even at $80 a barrel, even unconventional oil could make acceptable margins. However such low oil prices would, he said, would be a “problem for renewable energy”. Shipping confidence at two-year high
Overall confidence levels in the shipping industry recovered to their highest level for two years in the three months ended February 2013, according to the latest Shipping Confidence Survey from international accountant and shipping adviser Moore Stephens. There was improved expectation of freight rate increases over the next 12 months, particularly in the dry bulk sector, and greater likelihood of new investment in the industry. Nevertheless, fuel costs were uppermost in the thoughts of a number of respondents. While some talked about the exciting prospects for LNG propulsion, others remained concerned about the rising cost of operating with heavy fuel oil.
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Moore Stephens’ Richard Greiner says another small increase in confidence is “very good news”
In February 2013, the average confidence level expressed by respondents in the markets in which they operate was 5.8 on a scale of 1 (low) to 10 (high), compared to the figure of 5.6 recorded in the previous survey in November 2012. The survey was launched in May 2008 with a confidence rating of 6.8. Moore Stephens shipping partner, Richard Greiner, said, “Another small increase in confidence is very good news. Indeed, two successive quarters of improved confidence is in many ways more encouraging than one sizeable swing. It suggests that confidence is slowly building, indicating the start of a credible recovery.” He added: “It is still early days, but the tone of the comments from respondents this time indicates something of a sea change. Whereas previous surveys have been dominated by concerns over specific issues such as tonnage overcapacity and the economic woes in Europe and elsewhere, this time there were no similar over-arching areas of concern identified by respondents.” Castrol questions SDA techniques
Lube oil manufacturer Castrol Marine says that concerns over corrosive wear risk in cross-head engines have led it to question the rigour of some widely used scavenge drain oil analysis (SDA ) techniques. It notes that factors influencing scavenge drain oil characteristics include fuel sulphur level, cylinder oil BN level, system oil contamination and operating profile. “Accuracy is critical in SDA interpretation, not least because it supports feed-rate assumptions that are critical to cylinder oil performance,” Castrol says. “It is not possible to analyse results accurately without comprehensive knowledge of the fuel oil, the new and used system oil, feed rates and operational data collected from the engine at the time of sampling,” says Paul Harrold, Castrol Marine technology manager. “Our view is that there are potential shortcomings in ship-based magnetic analyser type SDA approaches because they cannot identify corrosive wear.” Cylinder wear could be assumed to be under control due to a low response on ferro-magnetic analysers where, in fact, corrosion is taking place, Mr Harrold says. “This demands attention as evidence grows supporting our position that corrosive wear risk is going unacknowledged when cylinder oils of insufficient BN are used in slow steaming.” “We make no apology for renewing counselling caution on SDA methodology as the full consequences of lubricant selection when slow steaming continue to emerge,” says Mr Harrold. “Onboard SDA does not cover the full picture on cylinder oil feed rate optimisation. Normal corrosive wear patterns generate iron compounds which are predominantly non-magnetic and are thus not detected by onboard analysers.” gMB acquires Romanian Marine Bunker Balkan
Russian-based Gazpromneft Marine Bunker (GMB) has made its first international acquisition by taking over Marine Bunker Balkan S.A. (Romania) from Unicom Holding. Marine Bunker Balkan operates in the Black Sea port of Constanta and manages two bunker vessels, one storage vessel with a capacity of 4,000 tonnes and two mooring barges. It also leases the 1,500 tonne capacity Constanta Oil Terminal.
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In a statement, GMB says it will become one of one Constanta’s largest bunker operator with annual sales expected to exceed 100,000 tonnes. The company plans to further expand its presence in Romania, to the ports of Mangalia and Midia. It will supply fuel from Gazprom Neft’s Russian and Serbian refineries. Dan-Bunkering and Danish Ship Protection in link-up
Dan-Bunkering has joined forces with a Danish based anti-piracy company Danish Ship Protection to offer maritime security solutions which it says utilises “well trained and carefully selected Danish security specialists”. Dan-Bunkering says its security services include: consultancy on security, safety and threat assessment, audits and reviews of security procedures and standards, crew education and training of your crew, Danish guards armed with non-lethal weapons, a 24-hour manned situation centre in Copenhagen that can be contacted by guards onboard at any time, identity and access control at ports and passive security measures. Dan-Bunkering says the guards will train the ship’s crew in self-defence. Cockett group splits trading and supply
Following Vitol’s acquisition of 50% of the Cockett Group, the latter has split the company’s trading and physical supply activities. From1 March, all physical activities have operated as V-Marine Fuels. Cockett claims: “This will bring even greater clarity and value to its customers.” The existing physical activities, Associated Bunkeroil Contractors (ABC) and Cockett Marine Oil Supplies Ltd (CMOS) have been absorbed into this new division. The company says that the move “provides V-Marine Fuels the autonomy to expand its current footprint and range of physical supply services globally”. Poor market hits Chemoil
Singapore-listed international bunker supplier Chemoil made a loss on continuing operations of $24.7 million in the year to 31 December but a profit of $153.2 million overall, attributable mainly to the sale of its terminal assets in Singapore late last year. Revenue increased to $3.3 billion during Q4, up 6% from Q4 2011 last year, and an increase of 24% to $13.6 billion for the year on the back of a 15% increase in sales to 5.3 million tonnes, and of a 16% increase for the year, to 20.3 million tonnes. However gross contribution per tonne, the company’s key margin indicator, was lower at $6.4 in Q4, down from $10.7 in Q$ 2011, and at $6.7 for the whole year, down from $8.9. The company’s CFO, Fred Bendle, said: “There was continued weakness in our customer base as well as narrow spreads in the fuel oil markets during 2012, thereby impacting our margins per ton. Likewise, with the weakness in the shipping sector, we marked down our shipping assets, contributing to the loss from continuing operations. Overall, our financial position has greatly improved with shareholders’ funds of $484 million.” Aegean’s “strong year”
Greek-based major bunker supplier Aegean Marine Petroleum Network Inc sold 10,620,864 tonnes in the year to the end of December 2012, marginally down from the 10,646,271 sold in 2011. EBITDA was $19.5 million in Q4 2012 and $87.6 million for the
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full year while EBITDA adjusted for the sale of vessels was $21.3 million in Q4 2012 and $93.6 million for the full year. In 2011 full year EBITDA, adjusted for the loss on sale of a non-core asset, was $82.4 million Aegean’s President E Nikolas Tavlarios said: “Our eighth consecutive quarter of profitability rounded out a year of strong performance for Aegean. During the fourth quarter, we further strengthened our integrated marine fuel logistics chain and continued to build volume in our lubricants business.” He continued: “Throughout 2012, we grew our business across all key areas as we executed on our growth initiatives, made notable progress in diversifying and expanding our revenue base and increased our global market share. At the same time, we reduced our operating expense structure and leveraged our fixed infrastructure – both of which positively impacted our bottom line.”
OW Bunker adds vessel
Major supplier and trader of marine fuels and lubricants, OW Bunker, is operating a second bunker tanker as part of its new North American business. The 8,182 dwt Wappen von Hamburg has been taken on long-term time charter and will operate offshore in the Gulf of Mexico from March 2013, joining the Elisalex Schulte. Supplies are made in international waters off both the Texas and Louisiana coastlines. The tanker is equipped with dedicated tanks to provide complete segregation of low sulphur fuel oil (LSFO), heavy fuel oil (HFO), and marine gas oil (MGO). “The introduction of Wappen von Hamburg provides us with the ability to provide all our customers, no matter what their vessel type, with a comprehensive offshore fuel supply solution,” said Adrian Tolson, regional manager, physical operation, OW Bunker.
The Wappen von Hamburg is now operating in the US Gulf for OW Bunker
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Shipping sector stands its ground
New advice from the European Environment Agency on how to cut global warming has received a cool reception from the industry
new report from the European Environment Agency (EEA) on emissions of air pollutants and greenhouse gases by the shipping sector concludes that both have increased substantially in the past two decades, contributing to climate change and air pollution problems. However, EEA Technical report No 4/2013, based on recent scientific studies, also says that, at the global level, the combined emissions from ships have a net cooling effect on the climate, according to recent scientific literature. This is because these aerosols directly scatter some radiation and indirectly lead to cloud formation. The EEA says overall cooling effect is rather uncertain. Nevertheless, it seems that the cooling effect of aerosols is currently larger than the warming effect of greenhouse gas emissions. The EEA has also carried out a model simulation that shows that the direct aerosol cooling effect may be slightly reduced by new EU rules on sulphur content in ship fuels. However, there is still some uncertainty as changes in cloud formation and other direct and indirect effects are not taken into account in this modelling.
These findings chime with the views of some within the shipping industry who question the wisdom of cutting sulphur emissions. However, that was countered by EEA Executive Director Jacqueline McGlade, who said: “This study shows the complex effects different emissions are having on the planet. We need initiatives that protect the environment as an overall system. The choice between either clean air or mitigating climate change is a false dichotomy – Europe needs both. By avoiding unnecessary movement of goods and improving transport efficiency, we can address both air pollution and greenhouse gas mitigation together.” The International Chamber of Shipping’s Director of External Relations, Simon Bennett, responded: “We would very be concerned
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There is still uncertainty over the impact of ship emissions on climate change
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by any suggestion that some maritime transport is unnecessary. Shipping facilitates global trade and is the most carbon-efficient form of commercial transport. I presume Jacqueline McGlade is not advocating modal shift to less environmentally friendly forms of transport or some form of environmental protectionism?” An EAA statement about its report also asserted: “Compared to other economic sectors, shipping is currently one of the most unregulated sources of air pollution.” That statement, too, drew a sharp response from Bennett, who commented: “While we agree that the best means of reducing CO2 emissions is improving fuel efficiency, we refute that shipping is less regulated than other sectors. As a result of IMO regulations, which are being implemented in Europe as well as the North America through Emission Control Areas, shipping is about to switch, at huge expense, to low sulphur distillate fuel.” He added: “Shipping is also the only industrial sector to have a binding global agreement, through the International Maritime Organization (IMO), which entered into force this year to reduce the industry’s CO2 emissions worldwide, and we are on track to reduce our CO2 per tonne of cargo carried one kilometre by 20% by 2020 compared to 2005. CO2 is a global problem and shipping is global industry requiring global regulation. Regional regulation of shipping will do little to reduce shipping’s contribution to CO2 emissions, which has recently been recognised by the European Commission, which has pledged to work for a global solution via the IMO.” The report argues that the shipping sector needs an integrated monitoring, reporting and verification system for emissions in European waters to systematically address sulphur and greenhouse gas emissions together.
ARE YOUR BUNKERING NEEDS A PUZZLE?
Culture of compliance
Meanwhile, two new, related studies into shipping and greenhouse gas emissions published by the Seafarers International Research Centre (SIRC) at the UK’s Cardiff University find that the bunker and shipping industries have a “culture of compliance”. However, introducing a carbon emission levy would be a complex task and could be undermined by evasion through collusion between suppliers and shipowners. The SIRC report Effectiveness of international regulation of pollution controls: the case of the governance of ship emissions states: “There is currently a ‘culture of compliance’ in the industry, with the proportion of ship detentions as a percentage of Paris MoU inspections falling from 9% in 2001 to just 3% in 2010. But in this highly competitive industry, operator compliance depends crucially on the perception that one’s competitors are also compliant – the level playing field.” The other report, Issues in the enforcement of future international regulations on ships’ carbon emissions, highlights the complexities and uncertainties associated with any plan to impose any sort of carbon emissions tax on shipping. It warns that the biggest enforcement challenge to a global fuel levy is the scope for “collusion between bunkerers (sic) and ship operators or charterers to understate bunker sales in order to evade part, or all, of the levy due”. Meanwhile, the International Chamber of Shipping’s chairman has warned that measures to reduce shipping’s impact on the environment need to also be economically sustainable. Speaking at the Connecticut Maritime Association event in March, Masamichi Morooka told delegates: “In a truly difficult economic climate like the present, which for many shipping companies is the worst in living memory, there is really only one issue on the minds of ship operators working on the waterfront – and that question is: ‘how are we going to survive’?
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Sulphur solutions Ways to meet the 0.1% sulphur
challenge have been the subject of much debate recently
Masamichi Morooka, ICS chairman
“The protection of the environment is of great importance, but we must balance the measures we take with the economic impact of these measures. At present, shipping finance has virtually dried up. This is not just for new ships, but also for the investments needed to continue operating existing ships in a safe and environmentally sustainable manner,” he pointed out. Speaking during a key debate on The Regulatory Environment, he said that investing in environmental measures such as exhaust gas cleaning systems and green technologies to reduce CO2 emissions, as well as installing ballast water treatment systems and the use of distillate fuels, could cost the shipping industry “hundreds of billions”. “How will ship operators manage all these additional costs rising so high that they have a dramatic impact on world trade or force cargo back onto roads or to other, less carbon-efficient modes of transport?” Morooka asked. Challenging questions
“We are committed to protecting the environment, but I do not believe that shipowners should shy away from asking these challenging questions. “While our regulators have a responsibility to balance the interests of shipowners with the need to protect the environment and the interests of wider society, they also need to be pragmatic and to have an understanding of the impact that their actions are having on the industry’s own long-term sustainability. Otherwise there is a danger of creating an industry in which investors will not want to invest,” he warned.
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Simon Barham, Chief Operating Officer at Bibby Ship Management
he Eco Ship revolution may be on the horizon, but these new ships will not replace the existing fleet overnight and ship managers are under increasing pressure to come up with solutions to save shipowners money when it comes to fuel efficiency and operation expediency, according to Simon Barham, Chief Operating Officer at Bibby Ship Management. In a recent statement, he said that, among many issues that need to be considered will be the Emissions Control Areas (ECAs) and the “cost-related ability of ships to switch fuel as they move in and out of these areas”. He added: “It must be said that switching on to low sulphur fuel is not a problem, but switching on to gas oil is and that will need some
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modifications to the vessel. The main engines themselves are not designed to burn light fuels. That will mean that changes will have to be made – pumps will have to be examined, even the design of some ships will have to be looked at because it is debatable whether some will actually have enough space to carry the additional bunker fuel tanks. “As a lot of the existing fleet was built in the late 1990s or early 2000s, many will only have a couple of bunker tanks. They’re already carrying heavy fuel and light fuel and now they’re going to have to carry gas oil. There’s going to be a lot of conversions going on. There is a cost element involved there as well,” he added. Whatever the cost ship, operators will have to comply with the 0.1% sulphur limit when comes into effect in the ECAs in 2015. While much has been said about the use of LNG, interest in scrubbers appears to be building up. Speaking during the Singapore International Maritime Awards the country’s Minister for Transport, Lui Tuck Yew, announced several enhancements to the Maritime Singapore Green Initiative, aimed at encouraging companies to adopt environmentally-friendly shipping practices. Singapore-flagged ships that adopt approved SOx scrubber technology, “which go beyond the International Maritime Organization’s (IMO) emission requirements” will benefit from a 25% reduction in Initial Registration Fees and a 20% rebate on annual tonnage tax for qualifying ships. Singapore-flagged ships that adopt both energy efficient ship designs and approved SOx scrubber technology that exceeds IMO’s requirements will enjoy a 75% reduction of their Initial Registration Fees and 50% rebate on their annual tonnage tax. In addition, under Singapore’s Green Port Programme, the port dues reduction for ocean-going vessels that burn clean fuels or use approved abatement technology throughout their entire stay in the Port of Singapore will be increased from 15% to 25%. Meanwhile, speaking on the “commercial utilization of abatement systems” at the International Fujairah Bunkering and Fuel Oil Forum (Fujcon), a senior Wärtsilä executive said that using scrubbers was a better way of meeting upcoming sulphur restrictions than switching to MGO or LNG. Wartsila Environmental Solutions’ Director – Exhaust Gas Cleaning, Sigurd Some Jenssen told delegates that, while global demand for distillates is likely to increase and so the price of MGO is also set to rise, the price of HFO “will stay the same or even decrease”. He said that scrubbers had been demonstrated to work in the marine environment and their use would allow for the same bunkering practices and same engine operation as now. Jenssen also highlighted that, while HFO without scrubbers produced particulate matter – mainly large particles as soot, MGO is worse in that it produces fine particulate that is harmful to human health. He said that scrubbers remove “80-90% of particulates”. Noting that some shipowners had complained that scrubbers took up a lot of space, he said: “Different ships need different solutions and, so far, we have looked at 200 ships and we’ve always managed to find space for the scrubbers.” Stressing the need for quick action by ship operators, he said that it takes “roughly 18 months” from considering abatement technology for a particular ship to completion of installation.
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WEST & EAST AFRICA ATLANTIC/INDIAN OCEAN CANARY ISLANDS GREECE WORLDWIDE TRADING
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IBIA’s new chairman Simon Neo tells David Hughes what he hopes to achieve during his term of office
imon Neo has been in the oil and and bunkering business since 1984, when he worked as a supervisor at an oil terminal. After that he gained hands-on experience at the sharp end, as a senior surveyor involved in ship to ship transfers, blending, quantity and quality surveys etc. Since 1992, he has held several senior executive positions in the bunker industry including five years with Wilhelmsen Bunkering where he became general manger in 2007. He has subsequently been deputy managing director for Equatorial Marine Fuels and regional manager for Integra Fuels (Asia). In July last year, Neo established his own bunker broker firm, Piroj International. I ask what he would most like to achieve during his time as chairman? The answer is basically to see IBIA doing more. He says: “During my term as chairman, I hope to reach out to more members and see what IBIA can do better for them. As you know, we are going through some changes at the secretariat. I hope these will bring us new ideals and new initiatives to create a more vibrant and active IBIA which will increase the value of membership to all players in the bunker industry.” On the main challenges facing the bunkering industry today, Neo is clear that they were all linked to compliance issues. “Take the move to low sulphur,” he explains. “New International Maritime Organization (IMO) regulations applying to emission control areas (ECAs) will kick in by 2015, this is less then two years away. Where can we source the 0.10% sulphur required by IMO for the ECA zones? Should we continue to blend the fuel oil to 0.10% or just use magnesium oxide (MGO) to save the trouble? Then there is the question of the cost of MGO, will it go up higher as more vessels have to use them when they enter ECA?” He continues: “Other challenges that we are facing today include the very tight margins for the suppliers when they deliver the bunkers. All ship owners are squeezed on their freight rates and the high oil price just piles on the pressure. This is a big problem which will be very hard to tackle, made more difficult by the still gloomy economic outlook.”
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So how can IBIA assist in overcoming the the industry’s problems. Neo concedes: “IBIA has no absolutely perfect answers. There are no magic bullets. But, as IBIA, we will take the lead by holding regular discussions with the relevant authorities. We will be looking to find the right balance between competing concerns. Educating the industry about the big issues facing us and also providing it with the necessary leadership will be the keys to a successful IBIA. Within IBIA, we do have all the necessary expertise, experience and knowl-
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edge to help and guide the industry through these difficult times.” IBIA represent all participants in the bunkering process but does he think enough bunker purchasers are involved in the association? “We have a very good mix right now with a membership that covers the whole supply chain even right down to law and media firms. But in terms of percentage, yes we are looking to increase the number of members who are bunker purchasers. Most players in the bunker industry are in fact both sellers and buyers but we would like to see end users represented more strongly within the membership,” he says. So how will IBIA develop over the next few years? Neo sees a continuing need for change. He notes: “As the industry evolves, IBIA must follow. In the longer run, I see IBIA will have to be more involved in the regulatory matters. There will be a need to consult more often with the various regulatory bodies and authorities. Then there is the question as to whether we need to regulate our own members in the future, so as to ensure a level playing field. This will be another challenge for the association moving forward.” Neo also points out that one of the issues raised by members in an IBIA survey conducted earlier this year was the need to have access to reliable and impartial information about bunkers and bunkering. He says: “Our new business plan includes provision for this service and I am looking forward to its introduction later this year as a major additional membership benefit.” This year’s Convention is in Hong Kong. Is Asia the region we will see significant expansion of IBIA? “This year’s convention in Hong Kong will certainly be interesting,” Neo observes. “If I recall correctly, this will be the second time we are holding the convention there. Hong Kong is a shipping hub for vessels trading to China.
It is the third largest container port in the world right now. We are trying to expand our China-based membership and also throughout the rest of Asia.” Neo continues: “Yes, we hope to achieve significant progress while at Hong Kong towards our goal of growing our membership base in the region. It is worth remembering, though, that the IBIA Asia branch is already doing very well at this moment, with a team of dedicated elected Ex Co members who give a lot of their free time to help organise activities and to increase membership in Asia. IBIA’s board is quite happy with way membership is increasing in the region and with the various activities underway to promote IBIA in Asia. We are arranging, seminars, forums and training courses for the Asian bunker industry. This year the Asia Branch will host the 2nd Gala Dinner in Singapore for members not able to go all the way to London for the annual dinner in February. What do you think members can get out of their IBIA membership? “Well,” Simon replies, “personally as an IBIA member since 2005, I have learnt a lot about the issues facing the industry which I would not have done had I not joined. For example, I now have a good understanding of other ports and how they run their bunker operations – something I have found out through IBIA.” “Of course, IBIA offers far more than just the formal presentations at its various events worldwide, valuable as they are. The networking that accompanies all IBIA events is unique. As well as building up our industry knowledge, we also get to know many more bunkering people – new contacts, new friends. So the message to those in bunkering who have not yet joined us is ‘Take a look, there are many exciting things going on’.”
Last year’s successful IBIA Convention was held in Dubai. This November it will be Hong Kong’s turn
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As Sandra Speares reports, there has been plenty of activity among the oil majors in recent months, with new projects going forward for floating offshore facilities but also refinery closures
hell has recently announced that it is considering the sale of its retail, aviation, and supply and distribution downstream businesses in Italy but not its non-service station lubes and marine business, which the company says present “strong growth opportunities for the company in Italy and Shell stressed that Italy remained an import market. “The potential sale is consistent with Shell’s strategy to concentrate its global downstream businesses where it can be most competitive. Recent examples include the sale of refineries in the UK and Germany and Downstream businesses in Finland and Sweden as well as the establishment of joint ventures in Brazil and across Africa.” Shell Australia has also announced its Australian Geelong refinery is for sale. The proposed sale of the 120 kb/d refinery is in line with Shell’s global strategy to concentrate investment on large scale sites, such as the company’s world- scale Pulau Bukom refinery in Singapore, the company said. “The announcement underpins Shell’s local strategy to grow its retail and bulk fuels business, along with terminals and pipelines” the company said. It acknowledged that “other parties, with a different portfolio, may have a different strategy and want to enter or expand in the Australian refining market”.
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Although a successful sale was the objective “ There are other options available if a sale with agreeable terms and conditions cannot be reached – this could include converting the site to an import terminal,” the company said in a statement. Shell Australia’s downstream vice-president Andrew Smith acknowledged that the process will create a period of uncertainty for employees. He said Shell was committed to a timely sale process, providing support to employees during this period. “I understand this announcement will be difficult for refinery employees, but Shell will support them through this period of uncertainty,” Smith said. “Refinery employees in Geelong have made a significant contribution to both Shell and the local community over many years, supporting the economy in south-east Australia.” The company committed to make an announcement of any successful buyer as soon as it could, and aimed to conclude the sales process by the end of 2014. “Shell is one of Australia’s largest private sector investors, and remains committed to its business in Australia,” Smith said. Shell has operated in Australia for more than 110 years. It supplies fuel to around 900 Shell branded service stations across the nation – along with aviation fuel, marine fuel, chemicals, bitumen and lubricants to a wide range of customers.
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Competition between the US and Australia on the issue of gas exports has been hotting up in recent times, not least with shale gas developments and Shell announced that it was planning to use North Amercan natural gas to provide liquified natural gas (LNG) to its customers. Its North American investment includes two small-scale liquefaction units which, the company says, “will form the basis of two new LNG transport corridors in the Great Lakes and Gulf Coast regions”. A similar development was made by the company to open up a corridor in Canada. Shell is also working to use natural gas as a fuel in its own operations. “Natural gas is an abundant and cleaner-burning energy source in North America, and Shell is leveraging its LNG expertise and integrated strength to make LNG a viable fuel option for the commercial market,” said Marvin Odum, president, Shell Oil Company. “We are investing now in the infrastructure that will allow us to bring this innovative and cost-competitive fuel to our customers.” In the Gulf Coast Corridor, Shell plans to install a small-scale liquefaction unit (0.25 million tons per annum) at its Shell Geismar Chemicals facility in Geismar, Louisiana, in the United States. Once operational, this unit will supply LNG along the Mississippi River, the Intracoastal Waterway and to the offshore Gulf of Mexico and the onshore oil and gas exploration areas of Texas and Louisiana. To service oil and gas and other industrial customers in Texas and Louisiana, Shell is expanding its existing relationship with fuels and lubricants re-seller Martin Energy Services, a wholly-owned subsidiary of Martin Resource Management Corporation (MRMC). MRMC and its publicly traded affiliate, Martin Midstream Partners will provide terminal facilities, storage, transportation and distribution of LNG. Shell has a memorandum of understanding with Edison Chouest Offshore companies to supply LNG fuel to marine vessels that operate in the Gulf of Mexico and to provide what is anticipated to be the first LNG barging and bunkering operation in North America at Port Fourchon, Louisiana. The LNG transport barges will move the fuel from the Geismar production site to Port Fourchon where it will be bunkered into customer vessels. In the Great Lakes Corridor, Shell plans to install a small-scale liquefaction unit producting 0.25 million tons per annum at its Shell Sarnia Manufacturing Centre in Sarnia, Ontario, Canada. Once operational, this project will supply LNG fuel to all five Great Lakes, their bordering US states and Canadian provinces and the St Lawrence Seaway. The Interlake Steamship Company is expected to be the first marine customer in this region, as it begins the conversion of its vessels. Pending final regulatory permitting, these two new liquefaction units are expected to begin operations and production in about three years.
Central America, a market previously dominated by four-stroke power plants. Serge Dal Farra, head of marketing at Total Lubmarine, says: “This is a highly prestigious order for Lubmarine, secured in competition with all major oil companies worldwide. It is an endorsement of Lubmarine’s products and services, and recognition of its role as a leading supplier of lubricants to the power plant sector. Both the Panama Canal authorities and MAN acknowledged Lubmarine’s industry knowledge, technical and logistical expertise, product availability and proven service levels of service excellence.” Lubmarine has been working in Panama since 2011 under a marketing co-operation agreement with Maxum Oil Services, which includes the distribution of marine and power plant sales in Panama. As part of this agreement, Lubmarine’s Aurelia TI products have been used to lubricate three new power plants in the region. Total Lubmarine will supply 350 tonnes of lubricant to the new Miraflores plant in accordance with the exact delivery needs of the Panama Canal authorities, Dal Farra reveals: “Tank trucks and product facilities are ready to meet the supply demands of this new project, without compromising our present supply agreements with our vessel network and existing power plant clients. On-shore LNG projects appear to be losing their appeal in Australia, as shown by the recent announcement that Woodside Petroleum had halted its development of the $45 billion Browse onshore LNG project in Western Australia, saying it would instead consider a floating alternative which would be cheaper. Exxon Mobil and BHP Billiton have announced plans to build the world’s largest floating LNG plant off the northwestern coast of Australia. The move comes as a time when Australia’s LNG projects have been questioned, not least because of costly overruns on development in some cases. A report by Reuters estimates that he plant would boost Australia’s current LNG production by nearly 30%, producing 6 million to 7 million tonnes per annum, enough to fuel the LNG needs of Japan for about a month. Australia is currently Japan’s number one supplier for LNG, although recent gas exploration off the Japanese coast may threaten its export position over the longer term. Exxon and BHP’s decision to develop the Scarborough field using floating LNG is another vote of confidence in the as yet untried technology, which energy companies hope will help cut down on the ballooning costs of developing gas, the Reuters report said.
Total Lubmarine to supply new Panama Canal power plant
Marine lubricant supplier Total Lubmarine has secured a contract to supply lubricating oil to the Miraflores power plant in the Panama Canal. This installation is located near the existing locks, a few miles from Panama City. Total Lubmarine’s Talusia Universal lubricating oil will be used on two low-speed MAN B&W 12K80MC-S engines which will form part of the expansion of the Miraflores installation, the first two-stroke stationary power plant in Panama and
© Shell LNG exploration continues at apace
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As the pressure grows to both use fuel as economically as possible and also to switch between residual and distillate fuel safely and efficiently, owners are increasingly turning to automated systems
fter a period of extensive testing on board the Carnival Corporation subsidiary Princess Cruises’ Grand Princess, the cruise industry giant has signed an agreement with JOWA Technology and JOWA WFE for a fully automated fuel management system. The deal includes installation of equipment and related onboard training. The testing programme was carried out by Carnival and JOWA Technology engineers, with independent monitoring by Lloyd’s Register. The tested Diesel Switch DS MKII included a second display in the ECR, a compatibility test kit, homogenizer and a GPS connection with date/time stamp. A JOWA Water-in Fuel Emulsion unit was also tested. According to JOWA, the Diesel Switch DS MKII is the only unit in the market that carries Class Society Type Approval, and has been acknowledged by the US Coast Guard as capable of improving the safety of fuel changeover operations. JOWA also has an extensive reference list of successful installations outside the cruise industry. Carnival representatives says they believe that the automated fuel switching system an save fuel by optimising fuel changeover time when transiting in or out of emission control areas, and that the system has proven to be reliable, consistently accurate, and to reduce the potential for crew error. The DS MKII also has the built in capability to blend compatible heavy and distillate fuels, using in-line fuel blending to safely mix two compatible fuels to obtain a final product with constant, pre-set sulphur content in accordance with local regulations. To ensure the blending compatibility of two fuels, JOWA supplies a simple, portable testing kit for use by ship’s personnel. Further, the DS MKII has full control over the temperature gradient during fuel change over, minimizing risk of thermal shock, gassing, and the potential risk for loss of power. The JOWA system also offers an electronic data storage feature which includes start, stop, sulphur content of HFO, MDO and Blend Fuel, longitude, latitude, date and time.
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Meanwhile, shipping software house NAPA says that noon reports and paper logbooks are no longer the most effective means of monitoring and communicating fuel consumption and emissions data, according to NAPA. Currently, bunker fuel readings for most international vessels are taken as daily ‘noon reports’ – collected onboard and send to the shipowner on a daily basis during a vessel’s voyage. However,
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NAPA says, with bunker fuel costs at sustained record levels and environmental legislation relating to emissions of greenhouse gases (GHGs), sulphur oxide (SOx), nitrogen oxide (NOx) now in force, many ship owners and management companies have come under more scrutiny from charterers, authorities and other stakeholders, such as investors, to provide more accurate measurement of daily bunker fuel consumption and emissions levels. According to NAPA research, owners, managers and operators with large numbers of vessels under their control, are increasingly turning to electronic operational solutions that automatically communicate with shore-based offices as frequently as every 10 minutes. This gives those with the ultimate responsibility “real-time” awareness of a vessel’s fuel consumption, location, the weather conditions it is facing, the speed it is travelling at and further data that can help to ensure that these vessels are operating to the safety and efficiency standards owners, operators, charterers and other stakeholders expect of them. While there are commercial and safety benefits to having more accurate and real-time data, the latest condition monitoring software has the potential to enable greater effectiveness in the legislative drive to reduce GHG emissions from shipping. Papers were presented at both International Maritime Organisation (IMO) Marine Environment Protection Committee (MEPC) meetings in 2012 on the subject of monitoring while the European Commission has declared its intention to pursue mandatory monitoring, reporting and verification of vessel fuel consumption. Industrial installations and the aviation industry already face requirements for measurement and reporting and the technology is available for the shipping industry to do the same. These systems are also claimed to have significant benefits in measuring the effectiveness of any new technologies that have been fitted to a vessel. When the Finnish shipping company Bore wanted to verify efficiency savings from NAPA for Operations SEEMP software and WE Tech Solutions – Variable Frequency Drive Shaft Generator (VFD SG) application on their Ro-Ro vessel M/V Bore Sea, NAPA Office - with real-time reporting and logbooks – was used to record improvements in fuel consumption (The test was reported in World Bunkering Spring 2013, p43). The software suite was shown to have saved the company 6% in fuel while the VFD SG had provided 10% savings, an important decision-making tool should they look to increase efficiency on other vessels. Optimising energy use
In another development, Tecnitas, the consultancy arm of French classification society Bureau Veritas (BV), has launched what it describes as a “powerful new software tool, E2, aimed at optimising energy usage for both individual ships and across fleets”. E2 is a user-friendly tool which enables shipowners to maximise the gains in energy efficiency and emission reduction which can be obtained through proper use of IMO’s Ship Energy Efficiency Monitoring Plan (SEEMP). Claude Andreau, head of engineering, Tecnitas, says: “The SEEMP seeks to improve a ship’s energy efficiency through four steps: planning,
World Bunkering Summer 2013
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Tecnitas has launched a new energy use software tool, E2
implementation, monitoring and measurements and self-evaluation and improvement. We hear a lot about energy-saving devices which can be fitted and operational savings which can be made, but in our experience, shipowners do not know which measures provide the best savings simply because they don’t have the right information to base decisions on. E2 solves that problem by collecting and evaluating all the information needed to make energy saving decisions. It then produces Key Performance Indicators (KPIs) and benchmarks individual ships or whole fleets against them.” E2 has different modes. Initially it is used by ships’ crews in the Acquisition mode to monitor, measure and record actual consumption on board in a variety of different cargo and navigation conditions. The software can then calculate the corresponding fuel KPIs and emissions KPIs. Two additional modes are available for running E2 software: the Simulation mode and the Benchmark mode, both of them providing decision-making tools for the ship or charterer’s operational management. In Simulation mode, E2 will give access to reference values for a given voyage and to the corresponding calculated reference fuel KPI’s. Data collected in the on-going Acquisition mode can then be compared with the Simulation to deliver the information needed to implement improvement measures and calculate the Yearly Energy Efficiency Operating Index (EEOI). The purpose of E2’s Benchmark mode is to benchmark, follow up and monitor the energy efficiency performance of different ships within the fleet or of the same ship for different voyages. The combination of Acquisition mode, Simulation mode and Benchmark modes mean that E2 software is able to deliver useful information for defining the fleet management strategy for energy efficiency. The currently available version of E2 software (v1.2) is based on manual acquisition of the input data such as the fuel consumption recorded onboard. A demo version with full capabilities (acquisition, simulation and benchmark modes) but limited time access is available. Development work is underway on an upgrade which will acquire the inputs automatically through flow meters and GPS. These new capabilities will enhance the accuracy of the data acquisition and will give access to more advanced analyses and diagnosis.
Surveyoring the future
David Hughes asks Douglas Raitt and gunnar kjeldsen what the future holds for surveyors
caught up with LR FOBAS’s Global Manager Douglas Raitt and DNV Petroleum Services’ Regional Manager Fujairah Gunnar Kjeldsen at the recent Fujairah Bunkering & Fuel Oil Forum (Fujcon) and asked each of them the same questions about the current role of surveyors and whether they will continued to be needed.
DH: Do you have an idea of the percentage of stems in Singapore that use surveyors? Is this the same in fujairah?
DR: At Singapore, about 20% of all stems are attended by surveyors. Global percentage is probably around 10-15% of all stems and I would put the figure for Fujairah at around 15%. Of course with all such projections, it is difficult to put a handle on the exact figures due to the competitive nature of the surveying industry. Many players provide surveying services to fuel buyers and the number of jobs do not get monitored centrally at most ports. With Singapore having a robust framework in place, it is easier to get a good idea of numbers, be it number of bunker stems (quantity delivered) delivered in port or surveyors attending such stems. gk: At Fujairah, it is likely to be over 50% now. I think there will be a similar percentage in Singapore as well. DH: Is demand for surveyors increasing and, if so, why? Is it the same worldwide?
DR: Demand for surveyors has definitely increased over the past 10 years or so on the back of an unprecedented rise in fuel costs to ship operators/fuel buyers. Today, as much as 60% of the operating
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FOBAS’s Global Manager Douglas Raitt
World Bunkering Summer 2013
cost of a vessel can be attributed to the fuel bill. A discrepancy of only a few tonnes will cost a fuel buyer dearly and thus having a surveyor on board a ship to monitor and measure the bunker delivery makes sense and the cost of engaging a surveyor will more than adequately be offset by the savings achieved of ultimately paying for fuel that was actually delivered. As fuel costs can only go one direction and that is up over the next few years and before the advent of alternative fuels such as liquified natural gas (LNG), methanol etc becoming a commoditised potential alternative/ reality, it would be envisaged new surveyors would have to come into the market. Continued rise in fuel costs = increase in survey demand. Demand for surveyors is increasing worldwide.
and managed by the Port Authority, through mandatory training â€“ both desk top as well as field training. There is a strict licensing scheme for surveyors carrying out bunker surveys in Singaporean waters. It should be noted that, in the rest of world, such training frameworks are lacking and surveyors are largely trained in-house at the inspection organisations they work for. This training would invariably not be standardised across the board and would differ slightly from organisation to organisation.
gk: DNV Petroleum Services has seen an increase in demand for our surveyors and one reason may be the scope of work and quality we adhere to during the bunkering process. This is true worldwide.
DH: Will surveyors be routinely used when barges are equipped with mass flowmeters, and will be it make a difference if ships are taking on gas oil (to be emission control area (ECA) compliant) rather than heavy fuel oil?
gk: There are sufficient surveyors in the market, but it is important to have qualified and trained surveyors who have a focus on marine fuel bunker routines.
DH: Are there sufficient surveyors?
DR: The market is always looking for surveyors. Over the past 10 years, we have seen many new players enter into the market off the back of increased demand by fuel buyers and increasingly higher fuel costs. Adequate surveyor training is needed to ensure that new bunker surveyors joining the industry have the skills set to carry out the work in line with best practices. In Singapore, the training and qualification of bunker surveyors is tightly controlled
World Bunkering Summer 2013
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DR: I do not believe the use of mass flow meters on barges would have a material impact on demand for bunker surveyors in the short-to-medium term. It all depends on how fast the market would routinely accept mass flow meter readings as final and binding. This in turn would depend on how in practice it will pan out. For example, if a receiving ship is still using conventional sounding methods as a means to gauge quantity received and this would differ widely with a barge mass flow meter reading, the ship would most likely protest and still demand barge soundings were taken to confirm quantity delivered. This would invariably involve engaging a surveyor again. Perhaps a surveyorâ€™s role may, in the longer term, have to change and take into account knowledge of coriolis mass flow meter technology and ability to interpret readings/issues etc in an unbiased way. Perhaps, too, the future lies in both a barge as well as a receiving ship having a mass flow meter to measure quantity delivered and received and any variations of such readings would form the basis of disputes. As it stands, the parties of the bunker fuel transaction generally appear to have opposing interests and having only part of the transaction measured by mass flow meter and the other continuing conventional methods of sounding could possibly complicate matters rather than simplify them. gk: Yes, surveyors will be routinely used with mass flow meters as well, but the scope of work will change. Mass meters are new in bunkering and need special set-ups, checks etc and so the verification role becomes even more important. Traditional measurements are equally accurate and offer a good basis to counter check any flow meter, especially in the early days. There may be an increase in mass flow meters being used (especially in Europe) from 2015 when the stem size of gas oil increases and the need to have a surveyor will be just as important for gas oil as heavy fuel oil since the scope of work of the surveyor will be the same. Already we are seeing a big increase in bunker survey work due to stricter quantity control by operators. This will certainly grow with higher value distillates.
LEgAL NEWS LNg
Fuel for thought Sandra Speares reports that more regulatory work is needed
before there is a large-scale switch to liquified natural gas (LNG)
s emission control regulations continue to tighten, using LNG as a fuel has become an increasingly hot topic, although industry observers differ as to the time frame for its widespread use and application. Maersk Line’s chief executive Søren Skou was recently quoted as saying he did not expect widespread use of the fuel on container ships in the near future, due to the space required for tanks, while China LNG Shipping International’s Paul Oliver, was also quoted recently as saying he did not believe China would be taking up the LNG as fuel option in the near future. As the regulatory pressures mount, there is however a perceived lack of regulation with respect to LNG bunkering, as identified in a report prepared for the European Maritime Safety Agency by classification society Germanischer Lloyd. The Norwegian maritime administration has been something of a pioneer in the domain of LNG as a fuel for ships and many of the 30 or so LNG fuelled ships operating in the Baltic or Norwegian waters fall under its aegis. The draft revised International Code for the Construction and Equipment of Ships Carrying Liquefied Gases in Bulk was agreed by the Sub-Committee on Bulk Liquids and Gases when it met for its 17th session in February. Parallel work continued during the session to develop the new international code of safety for ships using gases or other lowflash point fuels (IGF Code), which included preparation of draft amendments to SOLAS to make the IGF Code mandatory. Once finalised, both the draft IGF Code and SOLAS amendments will be put forward to the MSC for approval and adoption as a package. The draft IGF Code focuses on LNG as fuel but is also intended to cover other low flashpoint fuels. “The transport and handling of LNG as cargo on land and sea have been proven for many years. For LNG bunkering of gas-fuelled vessels some experience with smaller vessels operating in the Norwegian and the Baltic Seas has been gained. Due to the small number and size of gas-fuelled vessels, the current demand for LNG and the required bunker rates are mostly handled by LNG tank trucks
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using truck to ship transfer between the truck and the receiving vessel,” the report said. It furthermore identified a number of regulatory gaps as far as bunkering LNG as a fuel was concerned. These included the fact that the entire use of LNG as marine fuel and LNG bunkering procedures are not regulated by International Maritime Organisation (IMO) requirements and standards as LNG is formally not fully recognised as fuel for the time being and the definition of the bunkering process and the division of responsibilities for bunkering LNG as fuel. It also noted an absence of appropriate rules relating to the transportation of LNG on European inland waterways which affects the lack of construction requirements for LNG inland tankers, bunker barges and gas-fuelled inland waterway vessels. The use of LNG as fuel is not permitted on inland waterway vessels in general and is only possible by exemptions, which consequently does not stimulate the creation of larger LNG demand, the report said. It also noted that, “despite various industry driven initiatives common guidelines for port rules on LNG bunkering procedures are not yet available” and “a common risk assessment approach and risk acceptance criteria for LNG bunker procedures are missing, which requires each port to develop its own standards with potential differences as a result”. Other issues that need to be addressed include simultaneous LNG bunkering and loading while embarking or disembarking passengers as well as common safety accreditation criteria for LNG bunker companies, standards for the safe sampling of LNG as fuel, and requirements and guidelines for the measurement of sulphur content. Bunkering guidance is one of the key subjects addressed in a new gas technology report issued by classification society Lloyd’s Register. “It has been a big year so far for gas in shipping,” comments Luis Benito, LR’s global marine marketing manager. “We are seeing robust demand for LNG carriers; the world’s biggest LNG fuelled passenger ship, the LR-classed Viking Grace is now in operation in the Baltic Sea carrying 2,800 passengers; we have a growing number of gas-as-fuel projects underway or maturing”. Shell took delivery of a brand new inland waterway tanker in March, he said and “our
World Bunkering Summer 2013
marine stakeholders are looking to understand how to manage the risks involved with gas. “ As the Viking Grace operations show, the port operations are as important as those on-board ship. Guidance for ports on LNG risks are part of the mix, according to LR. “This is a critical area,” says Benito. “When you have large centres of population and passenger and freight operations underway, all stakeholders need to get themselves in a position where they can make commercial decisions on the basis that they have addressed the risks involved.” The report also looks at the potential for methanol as a marine fuel – and methanol can be manufactured from LNG. As Benito concludes, “Gas has a big future, but there are more options than just LNG. Methanol and other alternatives that can be developed from natural gas today, and from bio-sources at some point in the future, are also worth looking at.” Classification society DNV, meanwhile, now offers shipowners services to make newbuilds and existing vessels “LNG ready” with class-approved designs, ready for later, simple retrofit of LNG technology. The service enables shipowners to make smart choices and minimal investments now in readiness for when LNG bunkering becomes widely available, DNV maintains. Shipowners are supported through all stages of the decisionmaking process as they prepare to meet the IMO air emission regulations entering into force from 2015. There are three obvious technology options for meeting emission control area (ECA) requirements: installing a scrubber, switching to low sulphur fuel oil or to go for LNG as fuel and installing gas engines. Alternative fuels such as methanol and biofuels are also being developed. “Each option has different uncertainties: for example, the relative immaturity of some technologies and the effect market forces will have on the price of the different fuels. These factors are making commitment to a specific solution particularly difficult at this point in time,” says Gerd-Michael Würsig, business director for LNG-fuelled ships at DNV. “The cheapest investment may end up being the most expensive option in the long run, so many shipowners are rightly cautious.” DNV believes LNG will be a good solution for many for meeting both SOx and NOx requirements. However, the right option will
depend on the shipowner’s time horizon, says Dr Würsig. A wrong technical decision could increase the cumulative cost of operation by millions of US dollars over the ship’s lifetime. “Several elements must be in place before realising the benefits of an LNG fuelled vessel,” says Martin Wold, DNV’s project manager for the LNG ready service. He believes that shipowners should start by seeking answers to the following questions: Does LNG as fuel make sense financially for my project? Under which conditions would it make sense in the future? Are there feasible and practical ways of implementing LNG fuel in my project? “We recommend our clients to take a step-wise approach, and these are all questions we help them answer in the first stages of the LNG ready service,” he says. “After verifying the financial attractiveness and the technical feasibility on a high level, we move into the more detailed technical assessments if the client decides to proceed.” Even if LNG looks sensible after investigating the options, shipowners may still be hesitant to invest in expensive technology. DNV says. and the class society maintains that the “ability to have an ‘LNG ready’ ship provides them with a sensible alternative”. Meanwhile John Stirling, quality manager for World Fuel Services, has called on the industry to stop and think before going ahead with plans to use LNG as a fuel for ocean-going vessels. Speaking at the 8th International Fujairah Bunkering and Fuel Oil Forum, he pointed out that, until about two years ago, all the talk from the proponents of LNG was about coastal or shortsea shipping. He said that he thought that LNG was an excellent solution in many cases for vessels in such trades where bunkers could be taken from shoreside terminals. Since 2011, however, the emphasis had changed and LNG has been promoted as an option for the world fleet to replace heavy fuel oil when sulphur emissions restrictions tighten up in the emission control areas (ECAs) in 2015 and globally in 2020 or 2025. Doing this would mean ship-to-ship transfers which he described as a “game changer”. In addition, while the LNG sector has a very good safety record at the moment, if LNG as a fuel for ships is to expand, then standards of safety on board will need to be maintained and crews will need to be properly trained.
World Bunkering Summer 2013
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Singapore’s new testing lab
Why DNVPS has invested in a state-of-the-art facility
NV Petroleum Services (DNVPS) says that it is to increase its research and development (R&D) activities by setting up a dedicated laboratory to focus on R&D and specialised tests. A statement says that the move is part of the company’s “continued drive for innovative, quality, value-added services for its customers”. Scheduled to be up and running from May 2013, the new R&D laboratory will be located next to DNVPS’ existing laboratory at its headquarters in Singapore. The subsidiary of Norwegian-based classification society Det Norske Veritas has four ISO17025-accredited fuel laboratories strategically located in Fujairah, Houston, Rotterdam and Singapore and an R&D laboratory dedicated to research and specialised fuel tests. DNVPS says that, by setting up the strategic R&D laboratory in Singapore, DNVPS has demonstrated its strong and continued commitment to growth in Singapore and the region – which continues to advance as one of the world’s fastest developing economies despite the economic downturn. Besides investing resources and sophisticated equipment in the R&D laboratory, DNVPS says it will be using its fuel quality testing experience, huge database, ISO17025-accredited fuel laboratories located around the world and global network of customer offices to develop more laboratory specialists and be even more customercentric in its service offerings. DNVPS Managing Director Eirik Andreassen says: “We want to provide more value to our customers. Our new R&D laboratory will undertake specific and in-depth analysis of fuel quality, troubleshooting, development of new test methods and services.” The testing firm notes that operational challenges are exacerbated by the blending of unconventional components by bunker fuel suppliers to meet stringent sulphur regulatory requirements within the Emission Control Areas. DNVPS says it plans to delve deeper into fuel-related issues onboard ships, increase the number of joint industry projects that it
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runs with its partners and customers, and share its knowledge and innovations with the maritime industry. “We may have to conduct extensive tests and dig deep into the chemical composition of the fuels before we can determine the underlying cause of different problems – for instance, fuel pump sticking, filter clogging or poor combustion,” added Andreassen. New fuel testing system
Canadian technology company Xenemetrix, part of the Eurocontrol Technics Group, has launched a fuel monitoring system for ships. The company says that its Petro-Marine XRF is an onboard X-Ray Florescence analysis system for detecting sulphur in diesel fuel to provide compliance with new international regulations for sulphur oxides in diesel fuel. The system is also designed to also monitor wear metals in engine lubricating oil as well as cat nines and sea water contamination in fuel. The system can also detect fraudulent mixing of used lubrication oil in bunker fuels. The Petro-Marine XRF system is equipped with GPRS/WiFi/ Satellite Data Transfer and GPS which provides the ability to immediately upload location-based data to the shipping company for reporting and monitoring. The company estimates the market could be worth $1.6bn.
As Sandra Speares reports, risk management is needed to guard against volatile prices and, increasingly, non-payment
il prices continue to be volatile and hedging seems to be the best option for those companies that don’t want to be caught out by any further move upward. Managing risk is increasingly important both for bunker traders and suppliers, particularly as far as counterparties are concerned. Global Risk Management’s quarterly survey, predicts higher average oil prices. “While fundamentals remain well balanced and geopolitical unrest is not making headlines, the financial outlook is a major dark horse in the months ahead. The spread between equities and oil prices are near all-time record high. Something is about to happen. The ongoing talks between the West and Iran regarding the latter’s nuclear programme is continuously the number one geopolitical dark horse for oil prices. The risk of a military escalation in the Middle East would immediately affect oil prices to the upside.” According to the report, spare capacity is up as a result of lower Iranian production.“Total Organisation of the Petroleum Exporting Countries (OPEC) spare capacity is nearing record levels. The elephant in the room is, of course, the drop in Iranian production due to western sanctions. An estimated drop of approximately 1mbpd would have posed a significant upwards threat to oil prices had it not been for the increasing shale oil production in the North Dakota and Iraq production reaching multi-year-high.” Global Risk Management predicts that the Iraqi production should, however, be taken with a “pinch of desert sand” as much of the production is consumed domestically, so on a global scale the impact of higher production is limited – for now. The firm says that, if the more positive of current International Energy Agency (IEA) estimates, of 9 million barrels per day (mbpd) in 2020 proves to be correct, it will further help prevent major price spikes. The more pessimistic scenario is 5 mbpd by 2035, which would have a very limited impact on preventing price spikes,”.
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The survey also pointed to Sudanese supply disruption due to a dispute over pipeline fees. Global Risk Management estimates it will probably be another six months before Libyan production reaches pre-war levels. The fighting in the midst of the oil field will have caused some damage to the installations.
Uncertaintity in the Middle East – Iran’s President Ahmadinejad stands down in June
World Bunkering Summer 2013
The Iranian elections are due to be held in June. No clear successor to President Ahmadinejad, who has reached the maximum term in office, has been found. Before the internal political issues have been sorted out, the outlook for a deal with the West is bleak, the survey says. Global Risk Management remains cautiously optimistic that a diplomatic solution can be found to the nuclear issue. However, it expected the decline in Iranian production could last longer than expected. Production has obviously been affected by the increasing tightening of sanctions against the country. “We have some concerns as to [whether] the production can be easily resumed to pre-sanction levels, and how long a potential restart would take. Many of the fields in Iran have been producing for decades. A sudden drop in pressure from halted oil production could present some technical difficulties during a potential restart,” the firm cautions. The survey did not expect any implications to occur that would affect the oil market as a result of the Venezuelan elections, but with the largest proven reserves in the world, “Venezuela is one of the key players to watch”. Finally, Global Risk Management notes that, with the improving macro economic figures from the US, it will not be long before we see the country’s oil demand pick up again. That “only” leaves Europe to bounce back from the financial crisis. It says: “The outlook for Europe, however, remains mixed, and we do not expect any dramatic increases in oil demand to occur in the near future.” In conclusion, the survey said: “We set geopolitics to neutral, but with the low probability/high impact event of a military escalation between a Middle Eastern country and foreign nation.” Bunker suppliers as bankers
Cash is king, and those who are not facing a liquidity crisis may end up being bankers to those who do. This appears to increasingly be the case where bunker traders and suppliers are having to fund clients further down the supply chain. In the same way, while bunker suppliers are giving credit to their clients, the credit they are giving is without any financial security from their clients towards them. This position could sometimes go on for periods of many months.
This situation is not restricted to the bunker industry but is being replicated all over the shipping arena according to industry observers. However with access to credit being increasingly difficult, bunker suppliers could be taking on the role of banker, with all the risks that that entails. Living with risk
As Andrew Webster, a partner in JLT Speciality’s energy and marine division pointed out recently, it is not possible to eliminate risk and some level of risk has to be lived with. He told a recent seminar organised by London Shipping Law Centre that the key issue was how to manage the risk in the operation from which one was trying to make money. When considering risk, one was also talking about “keeping promises”, he told delegates. “When you perform a contract, you are actually keeping a promise to someone to something in the way you have said you would do it, in the manner you said you would do it and in the time frame within which you said you would do it.” The risk of not keeping promises is something that JLT deals with every day in the insurance context, he said. Capital is very difficult to find in the current environment and has its own terms and wants a return, he said. In return for capital, promises have to be made and it is the “promise to do things which drives the contract which you have to make with your capital provider”. These could be entities providing a mortgage or partners in a venture, he said which changes the whole dynamic and the way in which one deals with the individual providing the capital, he said. This could be contractually “tricky” he said. Risks at the start of a relationship are often those that lead to problems later on, he said. ”You have to consider the divorce before the marriage. It is not very pleasant, but if you do that constructively and carefully there are ways to deal with situations and resolve problems before they get to breaking point”. Just assuming that “everyone’s nice and they will get on with each other isn’t enough these days”. Brokers, he said, had experience of lots of types of risk, a wide view of all the markets available and a good relationship with those markets “which we maintain on a regular basis to enable us to anticipate and manage the issues that do occur when we are trying to seek credible risk transfer mechanisms for our clients. It is never too early to think about insurance”.
Freight Investor Services launched a live bunker fuel pricing service last year The FIS Bunker Screen automatically collates prices from multiple marketmakers and provides firm bids and offers in tight spreads along six months of the forward curve. Screen prices move with the market, reflecting up-to-the-minute changes in prices of the three key bunker fuel contracts: Singapore 180CST, Singapore 380CST and Rotterdam 3.5% Sulphur Barges. Indicative prices on these three contracts for a further three quarters and four calendar years are also available. Indicative prices can also be provided on the US Gulf Coast 3.0% contract.
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Freight Investor Services launched its FIS Bunker Screen last year
INTERvIEW MEDITERRANEAN OvERvIEW
A mature market World Bunkering talks to Johnny McIlroy of Cockett Marine Oil about the Mediterranean bunker market
he Mediterranean is often seen as a mature market with limited opportunities and strong competition. Does Cockett share that view, World Bunkering asked? “Yes,” says McIlroy, “we see it as a mature market with strongly established incumbents some of which are legacy companies linked to formerly state-owned national oil companies plus the oil majors, latterly joined by the Russians, predominately Lukoil. In addition, there are some niche areas where there is a strong local flavour to the business which has made entering the sector difficult for external operators – in this case Malta springs to mind and, to a lesser extent, the Istanbul market.” “However,” he says, “there are developments and we are seeing opportunist forays into supply, such as Bomin entering Valencia; Aegean is supposedly entering Barcelona; Lukoil has bought a refinery in Augusta, and so on. Some of these moves are either at the expense of, have replaced or are encroaching upon traditional markets for the likes of Cepsa/Repsol/Exxon. Also, we are seeing less supply and lack of low sulphur fuel oil (LSFO) in southern France as that market also begins to shrink and tonnage move to areas such as Malta despite recent disruption to that market. “For some trades, the requirement of any LSFO is dictating where to make a bunkers-only call over say a more traditional area but Gibraltar and Algeciras have only gone from strength to strength due to their pivotal position. “North African input has been minimal and hardly affected by the Arab Spring, but Egypt is developing into an area of concern as the state-owned suppliers are clearly without resources enough to maintain supply levels to the marine sector. In lieu of an adequate role for EGPC, Copetrole and Misr, several other companies are analysing the potential for entering the Suez market with talk of Russian and Arab Gulf suppliers showing real interest. “Given its geographic position, Suez should, by all rights, be a market that could generate liftings in excess of 300,000 tonnes per
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year were suppliers to provide good supply logistics and pricing. It is not clear if geo-political instability will inhibit this move. “Considering the state of the region economically and politically, trade route disruption and economic malaise in the likes of Syria, Jordan, Egypt, Libya and Tunisia has severely impacted cargo flows in and around the region with a negative knock-on effect on volumes for the east Mediterranean in particular, with volumes in the likes of Cyprus affected while Istanbul continues to also have to compete with Black Sea prices.” So does he see volumes increasing?
“Not overall but there will be new areas such as Ceyhan and possibly Iskenderun that come back into the market due to cargo throughput. In fact, much of the recent supply side development in the Mediterranean market has been driven by interest in new storage hubs, with expansion of facilities seemingly dotted in a chain across the Med on an East-West axis – with major projects in Cyprus, Malta and Algeciras to name a few.” Is it realistic to see the Mediterranean as one market?
“For some players, this argument seems to be driven by the notion of monitoring FOB Med Basis Italy, on the idea that if one moves they should in theory all move. However, this is at best a very blunt tool and makes for what we consider to be generally poor appraisals of the more localised market dynamics that can be seen to prevail in the Med. “In our opinion, there will continue to be differences between the likes of Suez and Istanbul, Genoa and Gibraltar etc. and it is the role of the trader to stay abreast of these, appraise clients and aid their buying decisions accordingly. “Some of these variations are affected by cargo flow dynamics too, for example, the brisk commodity trades ex-Black Sea to East Med, AG and Indian sub-continent whereby in effect shipowners
World Bunkering Summer 2013
or ship operators are looking for price and service comparisons not between west and east Med, but between Black Sea, Istanbul Straits, east Med and AG. In that equation, Gibraltar doesn’t figure as a reference point in effect.” What effect has the N European and uS Emission Control Areas (ECAs) had on the market so far – especially in the Strait of gibraltar area?
“We only have anecdotal information suggesting that the suppliers in Gibraltar will have seen more LSFO enquiries twinned with high sulphur fuel oil (HSFO) and that quite possibly the size of the LSFO portion has increased in relation to the HSFO. We suggest, that this is especially the case for the likes of tankers carrying crude from Novo to United States Enrichment Corporation (USEC) and United States Gulf Coast (USGC).” What will the Jan 2015 0.1% limits do to the market? Can ports like gibraltar cope with handling large amounts of MgO as well as HfO. Will there need to be additional storage and barge capacity?
“Even though Gibraltar is not a member of the EU and consequently not bound by the rules banning the sale and supply of MDO or HSGO , those diesel and HSGO tanks have been adapted to make way for the increased demand for LSGO. Supply barges will need to be further adapted to handle the greater demand for LSGO in place of LSFO. Most tank farms are geared towards greater clean product storage than black oil, including those just commissioned at Algeciras, so the storage is there. It’s more likely going to be a problem sourcing the LSGO on the scale demanded from the market than storing it.” Do you think the number of quantity disputes is increasing?
“Certain areas have made reputations for themselves and this trend amongst those suppliers has not diminished. Again, anecdotally, we
have heard of more issues relating to quantity though the state of the shipping and bunkering markets at present generates the types of strains in which these stories tend to multiply whatever their veracity. We are very stringent on the suppliers we use and / or we have tended to avoid those areas as best as possible while meeting our clients’ needs so our quantity disputes have not been on the rise.” Are there more quality disputes and, if so, are they due to the need for more blending?
“Regrettably, some cargoes with high aluminium and silicon still crop up, but that is no doubt in part due to cargo traders blending to the maximum rather than below the repeatability and reproducibility levels like the oil majors used to be known to do. As the current fuel oil specs are not ‘naturally occurring’ ex-refining process the necessity to blend fuels, especially for density and sulphur, enablesno-encourages traders/refiners to blend to the max and avoid quality give-away and this is always going to be in conflict with subscription test results. Fuel is invariably blended to restrict give-away – after all ISO8217 is a commercial specification. As per the quantity dispute issue, certain areas have been more stringent in relation to their controls and as a result are perceived to be free of the upswing in the number of issues and this is the case with quality disputes too. Foremost amongst these is the Gibraltar Straits area including Gibraltar, Algeciras and Ceuta. “Simply put, more and more parameters are on the specification and therefore there are more and more possibilities of off spec being identified but if suppliers utilise ISO4259 tolerances they can in turn protect themselves from claims. Invariably however if blend components are available, this technical safety net, or commercial give-away, will be removed or tightened, and therefore I would suggest cutters and blend components may not be as available as ARA etc or suppliers would utilise them in order to reduce the cost of their oil.”
The Mediterranean bunkering market is not growing significantly but does offer some opportunities
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Yol arkadasinizi lyi secin. Yakit ikmallemek profesyonellik gerektirir bunu bilenler zaten bizimle calisiyor, ya siz?
www.cockettgroup.com +44 (0)7920 489734 Europe/Americas: London, Rotterdam, Copenhagen, Miami, Rio De Janeiro Middle East/Africa: Dubai, Cape Town Asia Pacific: Singapore, Hong Kong, Seoul, Shanghai, Perth WB summer 2013.indb 44
MEDITERRANEAN fOCuS: TuRkEy
Turkish delights There have been departures from the Istanbul market,
but newcomers still see opportunities, while other developments
underline there is more to Turkey than just the Bosphorus market
here is no doubt that Istanbul is suffering from the current market conditions. IBIA board member and founder of prominent Turkish supplier Energy Petrol, Mustafa Muhtaroglu notes that demand is down significantly and two suppliers exited the market and one other has moved location. Muhtaroglu says: “These are signs of radical changes in the Istanbul bunker supply market where suppliers are facing difficulties in covering expenses and making money. Almost all suppliers are losing money but trying to see good days to come. Physical margins are almost zero and costs are increasing every day. The latest is that the Maritime Authority has ordered tankers of over 500 gt to take a pilot when loading bunkers – previously this only applied to tankers of over 1,000 gt tankers. This has increased the cost of operating barges.” He observes that one of the suppliers quitting the Istanbul market said clearly that it was going because of the intense competition. This is the main reason why some suppliers have already closed their physical operations. He adds that the Istanbul bunker market is obviously overcrowded. “Nine suppliers were really too many,” he says. “Now there are seven, which cannot be said to be an ideal number for a 2 million tonne market. Barging is also another issue for Istanbul as new tanker regulations mean some barges must be double/ double by 2016. The effect of this is likely to be that we will see some barges stopping operations. That means some suppliers will be in the position of being able to offer less supplies, which may help to balance the market. In the meantime there will be some newbuilding barges coming along. These are really expensive investments that will change market dynamics.” As to new entrants to the Turkish bunker scene, Muhtaroglu says: “We are used to hearing about familiar names coming in, most of them Russians. However, none of them announced anything
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until this February when the State Oil Company of the Azerbaijan Republic (SOCAR) told the market it was going to start a physical supply operation in the Ceyhan Iskenderun area using the Delta terminal there. This is the most exiting project for 10 years. A decade ago some 10 serious names made feasibility studies but none of them found it do-able.” He adds: “We are of course happy to have a bunkering service again at this location after 20 years and wish them good luck. We will see if it really is a good market or if the results are disappointing. In total 4,000 ships come to that port and so some level of demand will be there, of course. However it is really hard to offer good and competitive avails there in competition with Gibraltar and Malta. Most large vessels calling at this port will always have sufficient bunkers onboard and keep several options open for bunkering. We will see if volumes are high as stated by the storage company or if levels of activity there are low.” He remarks that experience at bunkering hubs elsewhere seems to show a profitable market can exist at small ports with 4,000 ship calls a year Turning to Muhtaroglu’s own company, Energy Petrol has fared comparatively well. He says: “We grew about 12% in 2012, achieving a turnover of US$200m.” He says that the result was better than expected given the obvious crises in shipping and shrinking volumes in bunkering everywhere. He says: “It is my 27th year in the industry and I am still learning. I learnt that choosing reliable people in crises is the main explanation for our growth in 2012.” He added that in the current market all buyers are trying to reduce costs and that the 1,973 orders his company won in 2012 were down to low prices and high quality bunkering service. This year started on a hopeful note, according to Muhtaroglu, with a good January despite long holidays in that month. However February and March were really very slow, with something like a 50% drop in demand in the Istanbul market. He says that most
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other players in the market are saying the same thing. It is the slowest market for five years. He does expect demand to pick up in April and for the market top be bitter until the summer. Late last year, it was reported that Turkish firm Calik Holding had signed a co-operation agreement with Russian oil giant Rosneft. The two companies will establish an associated company to operate within the oil trade in domestic and Mediterranean markets and, specifically, to sell bunkers. The agreement was signed by Calik Holding’s chairman Ahmet Calik and Rosneft’s president Eduard Khudainatov. Meanwhile, according to Turkish press reports, the country’s government is determined to forge ahead with plans for a 30-mile ship canal linking the Black Sea to the Sea of Marmara. The object would be to to ease congestion in the Bosphorus Strait. An official announcement in April said that the initial feasibility planning for Canal Istanbul has been completed and the project will be conducted along the Küçükçekmece-Basaksehir-Arnavutköy line. Constructing the waterway could have implications for the bunkering industry as the Bosphorus has few locations for basing bunkering operations. Ceyhan bunkering plan
Azerbaijan’s state oil company SOCAR, has joined forces with Turkish independent storage company Delta Rubis to set up marine fuel sales operations in Ceyhan, Turkey after obtaining license from the country’s Energy Market Regulatory Authority(EMRA). A five-year storage and supply deal has been agreed between SOCAR Turkey Distribution and Delta Rubis. SOCAR Marine says that it is aiming to unlock Ceyhan’s potential and turn it an important international bunkering hub. Ceyhan in south-east Turkey, with a Mediterranean coast, is the location of the
terminals of two major pipelines, the Baku-Tbilisi-Ceyhan (BTC) and the Kerkük–Yumurtalık. Ceyhan region’s ports handle 30M tonnes of dry cargo and 55 million tonnes of crude oil a year. The Chief Executive Officer of SOCAR Turkey Petroleum Energy Distribution Company, Mutluay Dogan said: “The Ceyhan region has strategic importance to SOCAR. This region is an area where Azerbaijan oil meets the world markets, and SOCAR is the main user of this route. Now with this co-operation, we took the first step in order to make Ceyhan an important hub for international marine fuels supply. Starting with the fuel sales to crude oil tankers; we will be the first provider of the comprehensive marine sales service in the Mediterranean region of Turkey. We have chosen Delta RUBIS, as our partner on this journey.” He added: “I believe these two major brands with their strong experience, superior product quality, operational excellence and quick responding structures will add value to maritime industry.” His counterpart at Delta Rubis, Sami Habbab, said: “In line with the growing volume of trade and investment projects in the region, in 2012, we have been accelerating our investment in Ceyhan Terminal. In this context, we are building a new jetty with six berths accommodating vessels up to 200.000 dwt, a new terminal investment for bunkering and domestic supply activities. Cooperation with SOCAR will transform Ceyhan into an international bunker fuels service centre. Accordingly, we expect, in the next five years, the region’s marine fuels sales to reach two million tons per year. As Delta Rubis, we are pleased to be together with the one of the world’s major oil company SOCAR in this project.” He added that the co-operation between the two companies “would be a great contribution to the development of the Ceyhan region”.
Istanbul enjoys a key location but can Ceyhan also thrive as a bunker port?
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MEDITERRANEAN fOCuS MEDITERRANEAN fOCuS: STRAIT Of gIBRALTAR
David Hughes reports on the active bunkering scene on both sides of the narrow stretch of water separating Europe and Africa
t just 7.7 nautical miles across at its narrowest point, the Strait of Gibraltar is a natural choke point on the main East-West trade route from the US and northern Europe to Asia. Over 70,000 ships a year pass through the Strait, making it an ideal location for selling bunkers. In addition to its obvious geographical advantage, the establishment of emission control areas (ECAs) also makes the region a convenient spot to take on ECA-compliant fuel. It is a highly competitive market, with many suppliers. According to one major player, maintaining a high quality of service is the challenge all competitors in the Strait have to concentrate on. The market relies entirely on imported products and therefore the challenge is to have enough storage available to be able to cope with the demand, not to lose time loading the barges, to offer enough shelter and to avoid delays for ships calling only for bunkers. Several of the players in the market operate at more than one location. For example, Aegean has put itself in a strong position with its new 220,000 cu m of bunker storage, five new double hull barges and its unique ability to supply in three different locations depending on weather. And bad weather often causes delays to bunkering operations in the Strait. Has the need to provide vessels with both ECA compliant and 3.5% sulphur bunkers made operations more complex/expensive? An industry insider told World Bunkering that the implementation of the ECA regulations is something that both suppliers and shipowners have to face. He said: â€œThere is no doubt that operation is becoming more and more complex. The handling of at least three different grades onboard the barges demands extra caution throughout the whole logistics chain. The need for better trained seamen together with the increase of cargo costs put an extra pressure in operational costs for all suppliers.â€? Algeciras
Although there there were over 9% fewer ship calls in 2012 compared to 2011, the Spanish port of Algeciras had a record year Algeciras port
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World Bunkering Summer 2013
for bunker sales. Algeciras Port Authority (APA) says this is because there was an increase in ship size with total gross tonnage increasing by 3.53% 341 million gt. Total bunkers supplied amounted to 2.9 million tonnes, an 11% increase over 2011. Cepsa, Repsol, BP and LIA Oil supply bunkers in Algeciras and APA says that seven double-hull bunker barges with a total capacity of 34,787m3, and ranging in size from 3,632m3 to 7,500m3 the biggest are in service. In addition, Peninsula Petroleum is reported to have started operating out of Algeciras. The big story in Algeciras has been the March opening of the Vopak Terminal Algeciras, which is the first terminal to offer independent oil storage services at the port. It has an initial total storage capacity of 403,000m3 in 22 tanks. The Vopak-designed facility is 80% owned by Vopak and 20% by Vilma Oil (20%). It can take vessels up to 225,000 dwt alongside. “We are very pleased with the opening of this new terminal within Vopak’s worldwide network of strategically located tank storage terminals,” said Eelco Hoekstra, board chairman and CEO of Vopak. “Vopak Terminal Algeciras will offer our international customers the opportunity to safely store their products ashore. The design of the terminal will give them the opportunity to optimally capitalise on any developments in the Mediterranean bunker and oil trading market.” Meanwhile, Vitol Tank Terminals International and Spanish energy company Endesa are also planning to jointly build a new bulk liquid storage facility. The Port of Algeciras Bay offers four anchorage areas. At one of them, anchorage D, pilotage is not compulsory when calling for bunker operations and a number of incentives have been put in place to encourage bunker calls. MARPOL services are free of charge as are light dues from the fourth call onwards and there is no port tax to pay for up to 72 hours.
As well as the new Vopak terminal, the Cepsa refinery has a total storage capacity of 2,100,000 m3, 900,000 m3 of which are dedicated to crude oil storage and the rest to refined products. The refinery has a jetty with seven berths and a single mooring buoy anchored in the bay. Ceuta
The Spanish territory of Ceuta, on the African side of the Strait of Gibraltar, is the base for two suppliers. Cepsa is the largest but the arrival of Spanish-based oil trader Vilma Oil as a physical supplier five years ago helped push up volumes. Cepsa supplies from the Ducar II Terminal, connected to Poniente Wharf, while Vilma Oil operates from Ducar I terminal, connected to Levante Wharf. Since January 2010, Vilma has operated a chartered 3,684m3 capacity bunker barge to work in the anchorage. It stores its fuel in an onshore 83,500m3 capacity tank farm and make deliveries of residual (including ECA-compliant) and distillate, both alongside the wharf and in the anchorage. Vilma Oil has ISO9001:2008 Management System Standard and the ISO14001:2004 Environmental Management Standard certification. Asked about the prospects for the rest of this year, a Vilma spokesperson told World Bunkering: “Given the ongoing economic activity, we expect the Strait of Gibraltar demand to remain broadly unchanged for this year. On the other hand, Ceuta’s market segment – unique in the area for middle-size vessels and deliveries, plus increased recognition of the port will ensure a continued strong position. There will be new challenges with the start of operations of the Vopak terminal at Algeciras, which will allow the entrance of new competitors in the Strait. Yet again, we expect this new competition to be more focused on the big container vessels therefore not impacting on the market segment of Ceuta. Overall we remain optimistic for the continued positive growth and development of Ceuta.”
Delivering 24 hours a day – a night time scene at Ceuta
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GIBRALTAR CENTRE OF EXCELLENCE FOR MARINE SERVICES
The Port of Gibraltar: • Close to main shipping routes • Competitively priced bunkers delivered by quality operators • Established, quality cruise facilities
Gibraltar Port Authority North Mole, Gibraltar Tel: +350 20046254 Fax: +350 20051513 email@example.com www.gibraltarport.com
• Safe anchorage
Seatrade-FULL - 2013.indd 1
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MEDITERRANEAN fOCuS: STRAIT Of gIBRALTAR
This year so far has been an interesting one for Gibraltar in terms of maritime developments, according to the chief executive of the Gibraltar Port Authority (GPA). Roy Stanbrook told World Bunkering: “In the midst of a global economic crisis and despite increasing competition at the regional level, the bunkering industry in Gibraltar has displayed an encouraging level of resilience. This is despite the volatility of the fuel markets and the consequent volatility of bunker prices across the board.” Capt Stanbrook noted that the number of vessels calling at Gibraltar to take bunkers has actually increased from the preceding period. The total volume of bunkers delivered year-on-year has however dipped slightly despite the greater number of vessel calls, confirming an expected trend of vessels taking on smaller bunker stems at each port. Aegean has now withdrawn its storage tanker from Gibraltar, leaving two such ships serving the local bunker industry, although it still continues to supply bunkers at Gibraltar anchorage. Capt Stanbrook predicted that this will have a significant impact. He said: “This development has increased the availability of anchoring slots in the bay, with the consequent effect of helping to alleviate the issue of congestion faced intermittently by vessels calling at Gibraltar.” He adds that the positive trends witnessed in the midst of difficult times for the maritime industry have reinforced the competitive nature of Gibraltar as a port of call for bunkers. This highlights the benefits to the customers of a competitive but also highly regulated port. The success of Gibraltar’s Bunkering Code of Practice has encouraged the GPA to extend this practice to encompass other marine services, and specifically ship-to-ship (STS) operations. Capt Stanbrook said: “November 2012 saw the launch of the STS Code of Practice,
which extends the model previously applied successfully to the bunker industry also being applied to the STS Service industry. The most significant point of the STS Code of Practice is that any STS operations supported from Gibraltar can only take place within British Gibraltar Territorial Waters, where supervision, regulation and support services are readily available. Initial indications from STS operations undertaken so far indicate that this change has been well received by the industry.” Announcing the new policy the Minister for Tourism, Commercial Affairs, Public Transport and the Port, Neil Costa, said: ”This amendment is part of the government’s on-going commitment to the protection of the environment and will serve to maintain the high standards for which Gibraltar has become known.” While the freeing-up of an anchorage by the departure of Aegean’s storage tanker will increase the capacity of the port, the long-running discussion – and controversy – over whether to allow bunkering in the Eastern Anchorage continues. A recent informal meeting of Gibraltar’s Minister for Environment, John Cortes, with Spanish environmentalists highlighted the political tensions. After the meeting, Cortes said a Spanish newspaper report that he had promised the environmentalists that there would be no bunkering in Gibraltar’s Eastern Anchorage, and that he was committed to ending offshore bunkering, was inaccurate. Cortes said Gibraltar had been considering opening the Eastern Anchorage to bunker operations, but was still debating the environmental impact. On ending offshore bunkering, Cortes stressed that he had only said that “it was still an intention to continue to explore the possibility for providing land-based bunkering”. At present, the port’s North Mole is the main commercial wharf and accommodates cruise ships as well as tankers when required. One prominent player in the local shipping scene said that, while no plans had yet been put forward, there was some interest in the idea of switching cruise ships to the South Mole and keeping the North Mole for “dirty” commercial activities. He said this could be a realistic option if more fuel was to be stored onshore. Tanger Med
Gibraltar remains a competitive player in the market, supplying at anchor or along side
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Tanger Med is the most recent bunkering port in the Strait of Gibraltar. Tanger Med Port Authority owns and manages two nearby anchoring areas, Alcazar and Fnideq, offering different anchoring alternatives for vessels waiting for orders or in need of supply. In 2012, 9,800 vessels called at the Tanger Med 1 and Passenger Port Harbour. Aegean operates out of Tanger Med and is the only supplier within the port perimeter and its anchorage areas. It can supply bunkers to passing vessels through the Straits of Gibraltar into those two anchorage areas giving an alternative bunkering location in case of congestion in other ports, and without course deviation. Aegean Marine Petroleum sees itself as being very well positioned to launch bunkering at Tanger Med and Aegean’s barges also supply the passing vessels from the anchorage areas situated near the new port. The company’s storage facility at Tanger Med has been fully operational since January this year. Aegean now replenishes its barges to serve the entire Strait area from Tanger Med and has withdrawn its storage tanker previously stationed at Gibraltar.
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MEDITERRANEAN fOCuS: gREECE
Optimism in challenging times
Sentiment within the Greek bunkering community is surprisingly upbeat, as David Hughes reports
ast year was a challenging one for Greece and bunkering, says Alexander Prokopakis, general manager-bunkering at JetOil Bunkering. Nevertheless, he tells World Bunkering, there has been something of a silver lining for his company, which is part of Mamidakis Brothers Group and the largest privately owned supplier of marine bunker fuels in Greece. “Despite the country’s difficult financial situation,” he says, “we were able to increase our market share and be the number one supplier for the cruise industry. Cruise calls are a big part of the volume of the port. After the cruise season was over, we stopped a barge for dry docking and we operated with three barges. This created some savings for our operations. We outperformed the general market with a dip in volumes of only 6%.” So is Prokopakis more confident about prospects now? “Yes,” he says, “more optimistic than a year ago. We are expecting a record for cruise calls. The containers segment is stable and with the start of construction of an extra pier has a positive outlook. The car carrier segment will eventually come back, it will take maybe one to two years but it will happen and the freight rates, dry and wet, can’t go lower, so yes I keep my optimism!” Irene Notias, managing director of bunker broker Prime Petroleum Services, said she too shared the optimism of others in Greece’s bunker industry. She added: “That is why I still have an office here instead of New York!” Other industry sources also note that Piraeus port has made some significant progress in terms of cargo turnaround in the last year especially in the container and ro-ro terminals. The number of cruiseships and related bunker was definitely up.
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The Port Authority has plans for further expansion at the container, ro-ro and cruise terminals, but details have not yet been revealed. Due to the current hectic economic environment, the recovery may take a little longer to materialise. One recent positive development has been new legislation granting international companies that ship their products to Greece and use the country’s ports as transshipment hubs VAT exemption. Also the completion of a 17-kilometre railway line connecting Piraeus port with the main European freight network should also give it a welcome boost. Looking at the broader industry situation, Prokopakis notes that official statistics have only been issued up to August last year, and only industry totals rather than by supplier. Up to August, the Piraeus’s bunker volumes were down 13%. He notes: “Since we had an increase in cruise vessels calls, we estimate that the final number for the year will be down 10% or 11%, meaning that for the last quarter, the decrease was much less. All other vessel sectors were down including containers.” However, other industry sources suggest that about 2.5 million tonnes were delivered into the Greek bunker market in 2012 . It is understood that Aegean has a market share of about 30%. Mr Prokopakis says that the bunker market hasn’t been affected by Greece’s economic problems. “There is some uncertainty and scepticism but the flow of business is normal. People realise that the strikes don’t help and strikes are much reduced and not in the port area so far,” he says. However, some other industry insiders say that last year’s financial turmoil means that demands for extended credit and very slow payments have major concerns for some suppliers and brokers. They
also say that the strict regulation of the Greek bunker market by the customs authority makes bunkering operation very inflexible. “The Greek economy has impacted the bunker market in a psychological way more than anything,” says Notias. “The effect is as real as we allow it to be.” She says that the strikes are futile and that people need to pull together and use their energy to make things work properly for the good of all. She also believes we have long been living in a “global casino” and Greece’s specific problems are not the real issue. Greece has been hit hard because it is a small country and especially vulnerable to the global trends. Other Mediterranean countries are, she believes, “in the same boat” . Notias has clear views on what the industry needs now. She says: “We need more business here. We need more logic here. We need more money here.” Greece-based major bunker global supplier Aegean Marine Petroleum Network Inc reported EBITDA of $87.6m for 2012, up from a comparable figure of $82.4m in 2011. Aegean’s president E Nikolas Tavlarios said: “Our eighth consecutive quarter of profitability rounded out a year of strong performance for Aegean. During the fourth quarter we further strengthened our integrated marine fuel logistics chain and continued to build volume in our lubricants business.” He continued: “Throughout 2012, we grew our business across all key areas as we executed our growth initiatives, made notable progress in diversifying and expanding our revenue base and
increased our global market share. At the same time, we reduced our operating expense structure and leveraged our fixed infrastructure – both of which positively impacted our bottom line.” In Greece, Aegean operates a fleet of nine tankers with capacities ranging from 500 tonnes to 5,000 tonnes. It expects demand to increase during the next years as new legislation, as already discussed, encouraging new container players to enter the market. Aegean can certainly be expected to do all it can to maintain its leading position in the Greek market. Prime Management Services represents Prime Petroleum Services as its purchasing and marketing arm in Greece as brokers only. The company handles the world-wide bunker purchases of numerous Greek owners and managers. While much of the news coming from Greece’s bunker industry is positive there is a shady bottom tier that is causing concern. Prokopakis refer to “unhealthy competition”. He says that some suppliers are giving Piraeus a bad name. He says that some buyers are squeezing the suppliers for the lowest price and the subsequent claims are causing problems for the port’s reputation. Prokopakis does not mention the illegal fuel trade, but Greek news agency Ekathimerini has reported growing government concern that fuel not subject to full levels of tax is finding its way into the bunker market. It was reported that Merchant Marine Minister Constantinos Mousouroulis and two deputy ministers attended a meeting in April at the Finance Ministry to discuss a report that said bunker fuel had become the biggest problem area.
The troubled Greek economy has impacted the bunker market
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gEOgRAPHICAL fOCuS: AuSTRALIA
Wizards of Oz
Australia has plenty of LNG, but will its shipowners be in the vanguard of those using LNG as ship’s bunkers? Sandra Speares finds out
NG has been much in the news in recent months in Australia, with export of gas expected to treble from 2010/11 figures of A$11bn by 2016/17, controversy surrounding Woodside Petroleum having stalled LNG production development, and a new report on LNG bunkering in the country being published. By the end of this decade, Australia may rival Qatar as the world’s largest exporter of LNG. Around 70% of the world’s LNG capacity currently under construction is in Australia. The country’s gas production is also projected to quadruple, reaching over 8,000 petajoules (210 billion m3) in 2034-2035. However, concerns have been raised in Australia with the announcement in March by the Japanese Agency for Natural Resources and Energy that it had started the world’s first offshore production test on methane hydrate and would extract natural gas off the coasts from Atsumi Peninsula to Shima Peninsula in Japan. It also confirmed the production of natural gas. Japan currently buys about 70% of Australia’s total LNG exports and there are fears of the impact any reduction on Japanese imports could have on the Australian industry. There was also controversy over Woodside Petroleum’s decision to shelve plans for its Browse onshore $45bn LNG project in Western Australia, saying it would instead consider a floating alternative, which would be cheaper. Competition in the form of shale gas supplies from North America is also a consideration and some analysts suggest that Woodside’s decision may see the end of onshore developments in favour of floating offshore facilities. “Woodside has completed its technical and commercial evaluation of the proposed Browse LNG development near James Price Point and determined that the development concept does not meet the company’s commercial requirements for a positive final investment decision,” the company said in a statement. It added: “Woodside will immediately engage with the Browse Joint Venture to recommend evaluation of other development concepts to commercialise the Browse resources, which could
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include floating technologies, a pipeline to existing LNG facilities in the Pilbara, or a smaller onshore option at the proposed Browse LNG Precinct near James Price Point.” There would be attractive payback periods from the additional investments required for LNG-fuelled shipping, along with no significant legal restrictions hindering development of LNG bunkering in Australia, according to a Joint Industry Project (JIP) focusing on LNG-fuelled tugs and offshore support vessels, managed by DNV with nine partners in Australia. The partners of the JIP – Australian Maritime Safety Authority, BOC (Linde Group), Farstad Shipping, Ports Australia, Rolls-Royce Marine, SVITZER Australia, Swire Pacific Offshore Operations, Teekay Shipping (Australia), Woodside Energy and DNV – are optimistic about the future of LNG as maritime fuel in Australia after having screened the possibilities to establish LNG bunkering in 10 Australian ports. The study recommends more technical guidelines and a clearer regulatory framework to be established, along with financial incentives to kick-start the development. When establishing LNG bunkering, the critical business phase is the first two to four years of operation, when the LNG suppliers rely on a few brave shipowners willing to be industry forerunners. After some years of successful operation, a second wave of ships is expected to enter the market, which will reduce suppliers’ uncertainty and reinforce the business case. The JIP focused specifically on the initial phase, and created roadmaps for necessary action for most rapid establishment of LNG bunkering in shortlisted ports. An accelerated approach can open up LNG bunkering in Australia by 2016. DNV Maritime Country Manager Tim Holt states: “We have been impressed with the interest and commitment shown by the Australian shipping industry in investigating LNG as a cleaner and locally available marine fuel.” JIP Project Manager Henning Mohn adds: “Increasing LNG production along with new international regulations boosts the interest in LNG fuelled shipping. This may actually, to some extent,
Platts 10th Annual
BUNKER & RESIDUAL FUEL OIL CONFERENCE Supply, Quality, and Regulations June 11–12, 2013 • Hilton Houston Post Oak Hotel
Register Today! The premier conference on the North American, Latin American, and global bunker and heavy fuel oil markets. A great opportunity to learn from and network with your colleagues.
2013 Keynote Addresses: • Global Fuel Oil Market Overview Seth Kleinman, Citigroup • Bunker Industry Regulations and Challenges— What to Expect Robin Meech, International Bunker Industry Association (IBIA)
Interactive Discussions On: • Supply, demand, and pricing dynamics for bunker and heavy fuel oil — US Gulf Coast and Latin America • Who’s producing LSFO and where can it be found? • Changing crude qualities and flows — Refinery capacity and feedstock update
For More Information or to Register: Visit us online at platts.com/bunkerfuel or call us at 866-355-2930 (toll-free in the US) or 781-430-2100 (direct). For speaking opportunities, contact: James Gillies Conference Manager tel: 781-430-2110 firstname.lastname@example.org For sponsorship opportunities, contact: Joshua Vernon Business Development Manager tel: 781-430-2113 email@example.com
• LNG — A good alternative to LSFO or distillates? Maersk Line, Ltd.’s experience Speakers at this year’s Bunker & Residual Fuel Oil Conference include industry leaders from: • • • • •
Citigroup IBIA IHS Downstream Maersk Line, Limited Chamber of Shipping of America
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• Muse, Stancil & Co. • KPI Bridge Oil • Transfuel Group • True North Chartering ... and many more Registration Code: PC322WB
switch ships from fuelling with imported fuel to using domestically produced LNG.” Australia has already a CO2 tax that affects parts of the maritime industry, but the report suggested that the introduction of an Emission Control Area will be would be unlikely to be introduced in the near future. However, large volumes of natural gas available locally and the Australian shipping industry’s reliance on imported marine fuel, not to mention the impact on the industry of Australia’s CO2 tax, make LNG an attractive proposition. The report also suggests that Australia has the relevant experience in building LNG-fuelled vessels and will inevitably be influenced by the IMO’s global sulphur cap of 0.5% coming in 2020 or 2025. One example is new catamaran, the 99-metre Lopez Mena, which has been undergoing sea trials. Built by Tasmanian company Incat, the vessel is the first dual fuel ferry ever, with LNG as its main fuel. The catamaran is destined for South America, where it will operate on the River Plate route between Buenos Aires in Argentina and Montevideo in Uruguay for the ferry company Buquebus. Findings of the JIP study also include: • There are no legal restrictions to develop LNG-fuelled shipping in Australia. • There is a limited regulatory framework for LNG bunkering in Australia. • There are many international standards and recommended practises that can supplement local standards in developing good practice for all aspects of using LNG as fuel. • Australia can soon benefit from the on-going ISO work on LNG bunkering standards, from the new IMO IGF code covering the technical, safety and training aspects of LNG as a fuel and from the STCW Convention. • LNG-fuelled tug and OSV’s operations may in turn trigger (or be triggered by) larger LNG consumption by oceangoing LNG-
fuelled merchant vessels, for example iron ore and coal bulk ships. • LNG can become an attractive solution provided that the right
price and pricing structure is established. Charterers’ potential request for use of LNG as fuel may boost the development. • The additional building costs for LNG-fuelled ships can, in some cases, be recovered within attractive payback periods. It also recommended that the Australian regulatory framework for LNG bunkering should be strengthened using existing and upcoming international standards and codes, and it said that specific attention is needed to give uniform local requirements on bunkering, technical design requirements, manning, responsibilities and training, emergency preparedness and response, the LNG supply chain to avoid operational disruptions, simultaneous LNG bunkering and goods or passenger loading/unloading, as well as standardisation of bunkering equipment and system interfaces and vapour gas management Given the need for a worldwide move towards using cleaner fuels “there are no legal show stoppers today in Australia for starting up LNG bunkering”, the report says. “However, there are no key drivers promoting LNG-fuelled ships at a commonwealth, state or territory level. Significant developments of LNG bunkering will probably not occur before a charterer, port, cargo owner or third party logistics provider actively initiates LNG as fuel.” It says: “Financial analysis demonstrates that LNG can be an economically attractive solution under certain circumstances.” “Governments, port authorities and the maritime industry, including shipowners and operators and fuel suppliers, should all be encouraged to accept the challenge of making the Australian maritime environment a leader in the operation of LNG- fuelled vessels by making infrastructure and fuel available in a sustainable, consistent, safe and environmentally sound manner.”
Australian shipowners may still be pondering the benefits of LNG as a fuel, but Tasmanian company Incat has just built the ‘Lopez Mena’, the world’s first dual fuel ferry, with LNG as its main fuel
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© Scott Aimi
Offices in Rostov-on-Don, Taganrog, Yeisk and the Port of Kavkaz Fleet of 13 own bunkering barges complying with loading and supplying regulations Own storage facilities giving flexible bunker delivery options Own terminal at the Port of Temryuk, providing safe fuel loading on tankers of up to 5,000 DWT Fuel deliveries compliant with MARPOL and SOLAS regulations
Our team is pleased to offer you our experience and knowledge, best prices and excellent service on a 24/7 basis.
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: firstname.lastname@example.org Yeisk Tel: +7 (86132) 2-60-64 E-mail:email@example.com Port Kavkaz Tel: +7 (86148) 4-43-47 E-mail: firstname.lastname@example.org
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www.ybunker.com 08/05/2013 15:43
Olga Bogacheva reports on the latest developments Olga Bogacheva
Russian sea and river transport in 2012
Russian sea and river transport a total of 20 million tonnes of cargo in 2012, notching up carried 25 billion tonne-miles, March’s full meeting of the Federal Marine and River Transport Agency Council heard. The Council reviewed progress in 2012 and discussed medium-term strategy, up to 2015. More than four million tonnes of cargo of all types were transported to the Far North, 4% more than 2011. A similar amount of cargo was carried through the Northern Sea Route during 2012 navigation, including over 1 million tonnes of transit cargo. Forty-one new ships, with a total deadweight of over one million tonnes, joined the Russian Fleet in 2012, while 22 more are expected to come into service in 2013. Currently, the total number of vessels entered in the Russian International Register is 568. Throughput at Russian sea ports grew by about 6% in 2012, to 567 million tonnes, with both dry cargoes and bulk liquid cargoes increasing. Volumes have been increasing as Russia’s port expansion programme continues. New port facilities capable of handling 72.5 million tonnes a year came into operation in 2012. Further port capacity growth, about 54 million tonnes, is expected this year. In 2016 to 2018, total annual trans-shipment throughput should reach 740 million tonnes. The Council considered that the construction of government service vessels has been “satisfactory”. Since 2010, 21 rescue vessels have been built while construction of four diesel and one nuclearpowered ice-breaker began last year. Throughput on inland waterway routes increased by 12%, to reach 142 million tonnes in 2012. Trans-shipment at river ports was almost flat at186 million tonnes, but liquid bulk cargoes grew by 25% against 2011. However, river passenger traffic dropped by 3.5%, to 13 million people carried. Few cruise ships used Russia’s inland waterways even though the Inland Water Code was amended in 2011 to allow foreign vessels to enter internal Russian waterways. Only eight foreign passenger vessels used Russian rivers during the 2012 summer navigation season.
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The total length of inland waterways open for navigation aroundthe clock increased slightly in 2012, while 23 major improvement projects were undertaken in 2012. Primorsk throughput flat
Primorsk port’s throughput dropped slightly in 2012, to 74.8 million tonnes in 2012 from 75.1 million tons in 2011, Administration of Saint Petersburg port informed. Oil output reduced by 3%, to 68.245 million tonnes, but diesel fuel volumes increased by 31% – to 6.5 million tons. Primorsk is the largest oil export port in the north-west of Russia, and is the site of the terminals of Transnefteproduct’s Baltic Pipeline (BPL) and Kstovo-Yaroslavl-Kirishi-Primorsk pipeline. vyborg’s volumes surge
Throughput at Vyborg port rose by 33% in 2012 over the previous year, to 1.462 million tonnes. Bulk cargoes were up 20%, to 955,600 tonnes while fertilizer throughput grew by 9%, to 548,000 tonnes and coal and coke cargoes grew 250%, to 381,000 tonnes. General cargo figures were up 210%, to 448,000 tonnes. Scrap iron increased sharply, by 76%, to 31,000 tonnes, but other ferrous metals throughput dropped by 62%, to 16,000 tonnes. Liquid chemical shipments also declined by 20%, to 50,000 tonnes. Vyborg is located at the intersection of waterways between the Finnish Gulf and Lake Saima – Vuoksa system. The port was privatised in 1992. It now comprises 13 berths, with a total length of 1,480 metres. Berth No. 1 is for passenger vessels. Berths No. 6–10 are for handling of general cargoes. Berths No. 11, 12 and 13 are mainly used for handling of bulk cargoes. Modest increases at vysotsk
Vysotsk port saw its cargo throughput rise by 2% in 2012, to 13.6 million tonnes. The major portion of the port’s throughput was oil and oil products, which increased by 1% over 2011. Coal throughput increased by 3%, to 3.3 million tons. The main port operators are Port Vysotskiy stevedoring company and RPK LUKOIL-II.
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St Peter Line expands
Russian ferry and cruiseship operator St Peter Line (SPL) is expanding rapidly, based on demand for cruises and accommodation vessels at Sochi which is hosting the Winter Olympics next year. Initially, the company took part in the Rosmorport tender for chartering out vessels intended to be used as floating hotels during the Olympics with St Peter Line was the only Russian company tendering and won its offer of two ferries, Princess Maria and Princess Anastasia. It then decided to organise the cruises between St Petersburg and Sochi. SPL is reported to be in talks with major cruise companies about setting up a joint venture. Russian owners complain about nitrogen emission limits
Russian shipowners, shipbuilders and engine manufacturers are complaining about new nitrogen emission restrictions being introduced under the auspices of the Convention on the Protection of the Marine Environment of the Baltic Sea Area, 1992, by its governing body the Helsinki Commission (Baltic Marine Environment Protection Commission – HELCOM). The Convention countries are: Russia, Germany, Denmark, Latvia, Livonia, Poland, Finland, Sweden and Estonia. Major Russian newspaper Izvestia reported that the issue was discussed at a conference in St Petersburg held by the Russian Shipping Register and with the support of the Transport Ministry. Several speakers blamed the adoption limits on lobbying by Finnish and Swedish businessmen. Aleksey Klyavin, president of the Shipping Companies Association (ASC), told Izvestia that all vessels built after 1 January 2016 and operating in the Baltic Sea should have engines meeting the new environmental standards. ASC claims existing technologies of nitrogen oxide emission reduction demand significant reconstruction of ships and, thus, will inevitably increase building costs. However, these increased expenses are unable to guarantee reduction of nitrogen emissions because emissions depend on the engine working mode. Klyavin emphasised that he believed environmental improvement is impossible without decreasing economic efficiency of shipping and causing a modal shift to road transport. He said that the new restrictions will lead to an overall increase in atmospheric pollution Experts from major Russian shipping company Sovcomflot claimed that the cost of meeting the new
requirements will increase the price of vessels by 20% and will cost the industry industry’s annual losses will amount between three and 12 billion rubles ($95m to $380m). Russian Marine Register spokesperson Olga Casanova told Izvestia that the European initiative HELCOM’s European members were probably driven more by commercial than environmental motives. She was referring to the manufacture of compliant equipment by some countries. River tanker construction begins
The Yaroslavsky Shipbuilding Factory has started work on the first RT 18 series river tanker . The contract for construction of three bunkering tankers for Federal Marine and River Transport Agency was signed by Yaroslavsky Shipbuilding Factory and Rechvodput department of finance and treasury last September as part of a fleet rejuvenation scheme. The RT 18 tankers are intended both for carrying oil products to storage facilities and for bunkering. The barges can carry heavy fuel oil, diesel and lubricants. St Petersburg developments
There is no space left at St Petersburg for further port development, most experts say. St Petersburg port invested 253 million rubles ($7.9m) in port infrastructure in 2012. The funds were spent surfacing the ro-ro terminal, improving security and improving railway connections. Part
The Construction of Bronka port requires significant investment
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of the investment was allocated for leasing payments for new cargo handling equipment, while heating systems were also improved. Only Global Ports Investments, the owner of Petrolesport (PLP) has announced significant developments in St Petersburg this year with $139m allocated for terminal expansion and for upgrading existing vehicle ferry terminal. Rather than at St Petersburg port itself, major investments are now aimed constructing Bronka and expanding of Ust-Luga port. So far six billion rubles ($190m) have been invested into Bronka’s construction. By the time the port opens, private investment should have reached 43.7 billion rubles. Total investment in Ust-Luga port including state and private funds, was about 60 billion rubles in 2012. Universal Transloading Complex (UTC) has invested 123 million rubles in 2012, when it bought a land lot for the construction of a railway link and maintenance facilities to cope with growing bulk and general cargo traffic. In addition, loading areas were modernised, a new storage area for bulk dry goods completed and a new road built. Meanwhile, Russian Transport Lines Group (RTL) intends to invest three billion rubles in Ust-Luga’s New Harbour port in Vistino by 2014. Lukoil-Bunker sold 482,770 tonnes of fuel in Saint Petersburg port during 2012. The vast majority was residual fuel and 55,816 tonnes was diesel. Significantly, 70% of the total was low sulphur.
Sidorov said that Primorsky Kray could become one of the three leading bunkering hubs in the Pacific region, along with Singapore and Pusan. gaspromneft’s new bunkering strategy
Gaspromneft’s bunkering division, Gazpromneft Marine Bunker (GMB), has updated its strategy and set goals for 2025. Currently GMB accounts for 18.6% of the Russian bunkering market and has a fleet of seven tankers, while bunkering services are provided in 24 Russian sea and river ports. Total GMB bunker sales were 2.9 million tonnes in 2012. Deliveries by barge increased by 38%, to 1.8 million tonnes. Under the new plan, GMB’s bunker volumes are expected to grow to 8.2 million tonnes by 2025, 16.7% more than the planned target for 2020, while the company expects its market share to rise to 27%. GMB will continue to develop its terminal network and bunkering fleet. By 2025, the company aims to own seven terminals and a fleet of 20 vessels. “Rapid development of Gaspromneft bunkering business allows the setting of more ambitious goals for 2025. New strict requirements on marine fuel quality have become the major feature of the world bunkering market. So Gazpromneft Marine Bunker intends to broaden its product line, implement LNG bunkering projects in this new emerging market sector and continue international expansion in future,” said Levan Kadagidze, Gaspromneft’s commercial director.
ust-Luga throughput doubled
Throughput at Ust-Luga port doubled to 46.612 million tonnes in 2012. Local stevedoring companies handled 15.6 million tonnes of coal, 922,000 tonnes of cast iron, 1.1 million tonnes of sulphur, 12.6 million tons of oil products, 14,2 million tons of raw oil and 472,231 tonnes of general goods. In addition, 167,380 automobiles went through the port. In all, there was a 20% increase over 2011. When current works are complete, the port is expected to handle 180 million tonnes of cargo a year. Primorsky kray bunkering market set to increase
Primorsky Kray’s bunker market could increase by 250%, to 5.5 million tonnes, in 2013, a spokesperson for the Russian Far Eastern region claimed at a recent Dialogue business club meeting. Some 2.2 million tonnes of bunkers were sold in Primorsky Kray in 2012. However, it was claimed that the figure could be 12 million tonnes by 2015. The major operators are Gazpromneft, Rosneft, Alyans Oil Company and Transit-DV. Mikhail Bryachak, the first Deputy Chairman of the Duma Transport Committee, Sergey Sidorov, the first Vice-Governor of Primorsky Kray, Igor Pushkarev, Vladivostok’s mayor and other business representatives were at the meeting.
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Murmansk’s record year
Murmansk Sea Trading Port (MSTP) has reported a record annual throughput of 15.7 million tonnes in 2012, easily exceeding the port’s target of 13.9 million tonnes and representing an increase over 2011’s figure of 1.2 million tonnes. Export cargoes increased by 9% and imports by 12.9%. The port’s coastal freight trade declined by 5%. The main commodities were: coal; apatite concentrate; iron-ore concentrate; non-iron metals and manganese ore. In total, 511 vessels loaded or discharged at the port, 21 more than in the previous year, while 223,157 cars were unloaded, 22,235 more than in 2011. Murmansk Bulk Terminal throughput was just over one million tonnes. Archangel port’s strong growth
In 2012, Archangel port increased its throughput by 26% compared to 2011, handling 5.6 million tonnes. Oil products throughput grew by 60.6%, to 2.2 million tonnes, timber handling dropped by 4.3%, to 469,000 tonnes, cellulose (including cardboard and paper) increased by 27.5%, to 115,300 tonnes, coal was up 163%, to 432,600 tonnes while bi-coastal freight also increased significantly, by 32.8%, to 2.1 million tonnes.
NIZHEGOROD BUNKER LTD Your reliable bunker supplier in the Volga basin and neighbouring waters offering high-quality fuel at flexible prices. IN PARTNERSHIP WITH ROSNEFT
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Nizhegorod Bunker Ltd 13/2 Ilyinskaya Street Tel/Fax: 007 831 434 4845 or 007 831 430 9826 E-mail: email@example.com Website: www.nbunker.ru
Nakhodka handles 59.9 million tonnes in 2012
Bunkering event in St Petersburg
The Russian Far East port of Nakhodka handled almost five million tonnes more cargo in 2012 than in the year before, according to the DV-ROSS news agency. The port handled 35.7 million tonnes of dry cargo, 26.4 million tonnes of coal, about 16 million tons of crude oil and almost eight million tons of oil products. Most of the coal, 21.8 million tonnes, was handled at Vostochny deep water port. All the crude oil was handled at Kozmino, while RN-Nakhodkanefteproduct handled the oil products. The port’s total throughput is expected to reach 70 million tonnes in 2013. Kozmino port is expected see an increase of 10 million tonnes thanks to its new second berth, which came into in operation at the end of 2012. Now, two tankers, of up to 150,000 dwt, can be worked at at the terminal simultaneously.
The sixth Russian Forum on Current Trends and Highlights of the Russian Bunkering Market is to be held in St Petersburg on 27 and 28 June. Issues to be discussed include: • “Problem-2015” – what changes are to be expected in the Russian bunkering market in the coming decade • Switch to LNG: infrastructure, reconstruction of engine fuel systems, ship owners’ experience, LNG production, LNG pricing • New environmental restrictions and their impact on the shipping industry; technologies and equipment reducing sulphur and nitrogen oxide content in marine fuel • Traditional fuel demand in the light of new restrictions on sulphur content • Far Eastern bunkering market • Economics and technologies of modern bunkering fleet building and other issues.
Tamanneftegaz operational results in 2012
Tamanneftegaz completed construction of its oil and LPG terminal at the Black Sea port of Zhelezny Rog Cape and operations started on 17 July 2012. Already, Taman is the largest port complex providing oil transfer services from railway to ships. Tamanneftegaz handled 1.4 million tonnes of crude oil during 2012 and its storage tanks took in 1.5 million tonnes of oil. The LPG terminal came into service in August and is a unique facility within the CIS. The terminal worked in a test mode and handled 13,300 tonnes of butane, 9,840 tonnes of propane-butane mixture and 4,854 tonnes of propane in its first six months of operation. The port’s heavy fuel oil terminal is expected to start operations in 2013. The total investment has been over $1.5 billion.
for more information visit: www.mrbunker.ru
gasprom go-ahead for vladivostok LNg project
Gasprom’s board of directors has approved a feasibility study on the construction of an LNG Plant in Vladivostok. The new LNG plant is to be built at Perevoznaya Harbour on the Lomonosov Peninsula and will consist of three production trains, each with an annual capacity of five million tonnes of LNG. The first train will be set in operation in 2018. It will use gas from Sakhalin, Yakutsk and Irkutsk. The target markets are the Asia-Pacific countries. It appears that Gasprom intends to finance and run the project without partners. The Russian government approved a plan in 2007 for the production, transport and supply of gas in the country’s far east, which envisioned potential exports to China and other Asia-Pacific countries. Gasprom was appointed the programme’s co-ordinator. New facilities for gas production were built at Sakhalin and Kamchatka. Yakutsk will soon be producing gas, too. Russian suppliers are investing in mordern tonnage
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Bunkering in Sea Of Ohotsk and Bering Sea. Transportation wholesale and retail of oil products in the Russian Far East ports
Morskoy Trust LLC KAMCHATSKIY REGION Office 206, 37, Vladivostokskaya str., Petropavlovsk-Kamchatskiy, Kamchatskiy Krai., Russia 683024 Phone/Fax: +7 4152 230763 Phone/Fax: +7 4152 232904 E-mail: firstname.lastname@example.org
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Nizhegorod-Bunker has been working in the oil products sales market for 15 years, and has acquired a reputation for being reliable supplier – a company with practical experience in the field, qualified personnel and its own fleet of vessels
he company’s general director, Vladimir Nikiforov, explains how Nizhegorod-Bunker has been able to succeed in the bunkering business.
How do you rate the readiness of your fleet for the 2013 navigation?
We are fully prepared for this year’s navigation season. We have completed all work planned for the past winter, such as all necessary repairs, equipment purchases and staff training. I would rate our readiness as high as 90% for operation. Most tankers are ready to leave the quay right now if need be. What fleet do you have at your disposal?
We have seven tankers, including shallow-draft vessels with a capacity of 300 tonnes as well as self-propelled bunker vessels with a capacity of between 600 and 1,500 tonnes. Additionally, at the end of last year, we bought a 2,500 tonnes tanker Lenaneft 2022, increasing our total fleet capacity to 6,500 tonnes. Apart from fleet availability, what are the other factors that create demand for a bunkering company?
The key factor is the availability of the actual product you supply. And we do have the product. In March 2013, our company won the tender for services including delivery and trans-shipment of oil products run by Rosneft Bunker and officially became the representative of Rosneft for the Nizhegord market. How do you control the quality of fuel supplied to a customer?
This is a crucial issue for the shipowners, as the quality of fuel affects the amount of residue in the engine and consequently the maintenance-free service life of the mechanisms. Only high-quality Vladimir Nikiforov
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fuel can ensure all the fuel systems of the ship run smoothly. This is exactly the kind of fuel we supply to the clients. We also issue a quality certificate which confirms the compliance of our fuel to high standards. It must be mentioned though, that priorities are changing on the bunkering market with regards to types of fuel. Diesel fuel, which for the past couple of years has been a favourite, is now not being used by the market. All shipping companies, including those working with passenger fleets, are switching to work on three types of heavy fuel. It’s up to a shipowner to choose to buy cheaper fuel now and spend more on repair later or buy a higher quality, more expensive fuel and save on repairs. Another important point here is that you can always check the quality of low-friction marine fuel on the ship and make a proper gradation of it. During the last navigation, there were cases of unethical practice when not only the low quality fuel was supplied, but also burner oil was used. That is why the reputation of the supplier is so important. Speaking about the competitive advantages of your company, we mentioned your fleet and quality product you supply. How about the people who work for you on the river and ashore?
Our team of professionals, who I trust 100%, is of the highest value to us. I can tell you with absolute confidence that we have very high standards. There is no task at present that we cannot fulfil. We have 70 members of staff working on the fleet and 20 working in the company management. All of them are fully qualified and experienced workers, who are fully trained and ensure safe tanker operation and bunkering procedures. What area do your vessels service?
Officially, we work at bunker spots Nizhniy Novgorod and Cherepovets. On top of that, we have agreed to bunker at Yaroslavl for 2013’s navigation. Are there any plans for the expansion of your business in other regions?
Yes, we would like to increase our presence in the north-western market. Now that we have purchased Lenaneft 2022, we are seriously thinking of supplying at St Petersburg, which would help us strengthen our position there.
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What complications do you foresee for this year’s navigation season?
The newly adopted law on transportation safety has had a number of administrative consequences, including for the bunkering market. They have toughened the requirements for the technical condition of the vessels. More money has had to be spent on staff training and safety measures. This obviously affects not only the bunkering, but also the shipping industry. The river bunkering community is also fearful of what will happen next year. As you know, 2014 is the year when Russia will comply with International Convention for the Prevention of Pollution from Ships (MARPOL) by completely banning single hull vessels. Another problem is a lack of payment discipline among the shipowners. Payments for freight are settled on after voyages have been complete and shipping companies try to postpone the payment until they have been paid. For bunkering companies, this means book debts and nonpayments. Unfortunately, you cannot completely insure your company from this kind of situation. What are the plans for Nizhegorod Bunker for the foreseeable future?
The main direction of development for our company was outlined by our founders 15 years ago. It is based on an honest approach and on providing a high-quality service from our vessels. Today, we have everything to fulfil that task – fleet, fuel resources and qualified personnel. We are constantly working on our financial strength, making partnerships with financial institutions to obtain credit line and bank guarantees. In addition to that, we keep improving our logistics for fuel delivery schemes so we can keep the price of the product at affordable levels. At the moment, these schemes include using our own oil storage facility in Nizhegorod Region and one rented by our company in Yaroslavl. Because part of our fuel is delivered by rail from Siberia, the price is attractive both to us and our clients. Therefore, working with us is not only convenient, but also beneficial and I hope that big companies will appreciate this.
Living with bio-derived fuels
Michael green of Intertek Lintec ShipCare Services looks at the challenges a move towards bio-derived material in marine fuels could bring
icrobial contamination of marine fuels is not a new issue, but it would appear that it may soon become more of a bugbear for vessel owners and operators. The growth of moulds, yeasts and bacteria has always been associated with distillate fuels and poor housekeeping practices on board ship. The driving factor for microbial growth within marine fuel is the presence of water within a vessel’s fuel system. Distillate fuels with a higher-than-expected water content tend to be viewed as being most susceptible to microbial growth, with the effect being seen far less frequently in residual fuels. Water provides the ideal growth medium for all microbes as it if offers a perfect environment to support their needs. In cases where contamination has been witnessed, the proliferation of microbes is always at its highest at the oil/water interface. The water provides a safe environment in which the microbes can reside. However, an additional concern in relation to microbial growth and contamination has surfaced, based on the possible presence of bioderived material in marine fuels. The presence of bio-derived material – or FAME – in fuel could add an extra concern for shipowners/ operators as it can act as a catalyst for microbial growth. The push for a greener environment and lower-emission fuels has forced the shipping sector to examine all possible options, including the use of bio fuel. At the moment, the ISO8217 marine fuel standard which regulates the quality of fuels (residuals and distillates) has a very clear stance on the inclusion of bio-derived material in marine fuel. Section 5 of the ISO8217:2012 marine fuel standard, which deals with the general requirements of fuel quality, clearly states that fuel shall be free from bio-derived materials other than ‘de minimis’ levels, and that blending of FAME is prohibited. This provides the first major stumbling block as far as the introduction of bio-fuels into the marine sector is concerned. However, the problems do not end there. The actual quality of the product and
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its inherent characteristics and tendencies provide further cause for concern. One of the major issues concerns the possibility of microbial growth, but this is not the only area of concern. Reduced low temperature flow properties and possible material deposition are further issues that can be expected. The presence of FAME in a marine fuel can also have severe implications as far as storage capabilities are concerned. Fuels that contain high levels of FAME can be susceptible to oxidation, and this casts doubt over long-term storage capabilities. From our own experiences, we have seen situations where parcels of distillate fuel have been stored on board for periods in excess of six months. Although problems relating to the use of bio-derived fuel are new in relation to the marine industry, they have already been addressed as far as land-based fuels are concerned. For those who choose to drive a diesel-powered automobile within the EU, fuel bought at the pump can have up to 7% bio content. However, it must be noted that the transition to bio-derived fuels in land-based applications has not been without problems and constant maintenance of filling stations is required to prevent problem fuel being passed to the end-user. If we consider the possible widespread introduction of bio-derived fuels within the marine sector, we must think of the overall consequences and whether the level of maintenance seen in the automotive industry can be achieved with the marine supply chain. Other questions regarding the regulation of product to be supplied and changes to operating procedures on board, also have to be considered in looking at the viability of the possible introduction of a ‘bio-grade’ marine fuel. This is not to suggest that the problems cannot be overcome, as we already have a very strong blueprint to follow in the example set by the automotive industry. The crux of the matter would appear to be whether the shipping industry is ready to embrace yet another green initiative when so many other alternatives have yet to gain a significant foothold in offering guaranteed future legislative compliance.
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Buying bunkers via the cloud
Jean-Hervé Jenn, CEO of marine IT solutions consultancy Inatech, explains how cloud-based procurement solutions can help bunker suppliers and shipping firms optimise their fuel procurement strategies.
he global bunker market, valued at around $150bn, is a key aspect of the shipping industry – and it’s a complex market with price depending on grades of fuel that vary from port to port. Large fleets typically have billion dollar bunkering budgets and in some cases, bunkering represents up to 60% of a fleet’s total operating costs. Even a small percentage improvement in trading for both fleet operators and suppliers can generate cost savings in the order of millions of dollars. Keeping control of costs has never been more important than during the economic crisis, but it’s also important to keep a fleet moving. With that in mind, fuel procurement is an obvious area for cost control. With prices varying at ports spread across the globe on a daily basis and individual ships calling for bunkering at any time, it’s not always practical to rely on a software solution that is tied to the office. The challenges for shipping firms and bunker traders both lie around the supply and demand of the right grades and blends of fuel. Traders rely on high volumes with low margins and tend to buy from refineries on long-term contracts and sell from their own inventory; back-to-back from the refinery’s inventory; and to other traders. A solid bunkering inventory and management strategy is essential and traders often use derivatives and contractual arrangements to overcome fluctuations in profitability. On the other hand, shipping operators need to weigh up many factors including price, availability, route, speed and in-port considerations to set the best bunkering strategy. A typical shipping operator may have a fleet of over 500 ships served by a global bunker purchasing team of less than 10 people, dealing with some 20 fuelling requests a day. While bunker procurement has traditionally relied on manually updated spreadsheets and even paper-based systems, they have
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their limitations, being dated, error-prone and poorly adapted to responding to real-time market data. Increasingly, bunker suppliers and shipping companies are turning to software solutions. Bringing together real-time market data and analysis with ship performance and integrating with other software, Inatech’s BunkerTECH Bunkering Solution and ShipTECH Shipping Solution are two such solutions. While these sorts of systems can be supplied and installed on individual PCs, there is a major trend to move to cloud computing. The first benefit is less reliance on local IT know-how, freeing up a business from administering IT systems such as software and hardware upgrades, back-ups and security. Second, being subscription-based, cloud computing makes it easier to benefit from flexibility, being able to accommodate business growth by ordering new licences or extra storage space and as long as employees have internet access, they can work from anywhere, meaning that out-of-hours emergencies are easier to resolve. The other advantage of a cloud-based subscription is that the software can be treated as operational rather than capital expenditure, eliminating the lengthy decision-making required for capital outlay. Whether cloud-based or not, bunkering management tools enable brokers to manage and plan their inventory efficiently. Shipping operators, on the other hand, benefit from real-time decision making, allowing them to identify the most cost-effective plan for ship bunkering. But does this type of technology really work? Bunker suppliers and shipping companies are reporting encouraging findings. Inatech customers have reported savings of around 0.1% in annual fuel procurement costs, equal to $4m on the bottom line for a bunkering spend of $4bn. For a five-figure investment, this can represent sound financial sense for shipping operators and bunker traders alike.
Who to invoice? Carel J H van Lynden of AKD law offices, Rotterdam, considers whether invoicing master and owners for a bunker supply can work
n the bunker industry it is common practice to issue invoices to “master and/or owners and/or operators and/or managers and/or charterers c/o…” or similar wording, followed by the name of the person or company actually ordering the bunkers. Does this mean, then, that a claim for the bunkers, when unpaid, can be made against the master, owners or vessel? Under the applicable 1952 Arrest Convention, an arrest may be made on a vessel in respect of which the maritime claim arose, when the owner is liable for the claim or when, under the applicable law, recovery against the vessel following that arrest is possible. Under Dutch (international private) law, a claim is recoverable against a vessel when that is the case (i) under the law which applies to the claim, and (ii) under the law of the flag of the vessel. As for (i), under Dutch substantive law, recovery of a bunker claim for which the owner is not liable is not possible. The owner is liable when it has ordered the bunkers itself, when this has been done on its behalf, for example, by its manager, or when the bunkers have been ordered by the bareboat charterer. When the claim is against the bareboat charterer, it should be instituted against the bareboat charterer and against the registered owner, claiming that the latter allows the claim to be enforced against the vessel. When a vessel is time-chartered and the time-charterer orders the bunkers, it is the time charterer who is liable, and not the owner. Almost all time charter parties contain “no lien clauses” and provisions forbidding the time-charterers from binding the owners to third parties. One therefore cannot easily allege that the time-charterer has bound the owner, or has ordered on behalf of the owner. Meanwhile, provisions in Dutch law general sales conditions stating that the bunkers have been supplied for account of the vessel do not help, because the general conditions apply between the contracting parties, i.e., the seller (supplier) and the buyer
WB summer 2013.indb 72
Carel J H van Lynden
(time-charterer). The signing of a bunker receipt by the master or chief engineer does not change that. In Dutch case law this has been consistently confirmed, for example in the Pagola case (Court of Rotterdam, 18 January 2012). In such cases, under Dutch substantive law, no recovery against the vessel is possible, and thus no arrest can be made of the vessel. NOVE (a Dutch organisation covering the energy industry) tried to tackle this in the general supply conditions that it drafted for its members, whereby Dutch law applies to the supply, but the question of whether a lien exists is governed by US federal law, which recognises a maritime lien against the vessel for the supply of bunkers. This clause has not yet been tested, but may work, even for an arrest within the Netherlands because (i) could then be answered positively. The Celine (Court of Rotterdam, 24 February 2012) dealt with a ship arrest for a claim for bunkers supplied under Turkish law to a Turkish-flag vessel. Under that law, a claim for bunkers against a timecharterer was recoverable against the vessel when the invoices were sent to the owner (“master and owners”) and where there was an involvement by the owner (such as the signing of the bunker receipt by the master or chief engineer), and when the claim concerned “necessities”. In this case, the arrest in the Netherlands was allowed. The case shows that, although under Dutch substantive law a claim for payment of bunkers supplied to the time charterer cannot be enforced against the vessel, it may nonetheless be possible to arrest the vessel in the Netherlands. Invoicing to “master and owners” can be an element under the law applicable to the claim for deciding whether an arrest may be made. In other countries, the method of invoicing may also be an important element. Therefore, invoicing to “master and owners”, and including all sorts of clauses in general trading conditions, makes sense – from the supplier’s point of view, anyway.
World Bunkering Summer 2013
IBC me riti Ma
WB summer 2013.indb 73
EQuIPMENT AND SERvICES
An enhanced performance
Ardmore Shipping has adopted SkySails Performance Monitor to cut fuel costs
rish tanker operator Ardmore Shipping has equipped its vessels with Performance Monitor, a vessel performance monitoring system from German manufacturer SkySails to evaluate the effectiveness of the applied fuel-saving technologies and for operational optimisation purposes. SkySails� Performance Monitor is a sensors-based computer system continuously collecting and analysing data about the ships and operating conditions, thus lending transparency to the interrelation between the various factors that determine the optimal settings for operating a vessel. The company says that, by providing just the right amount of real-time onboard and onshore data and decision support, the SkySails Performance Monitor delivers the necessary insights for improving a ship’s operational efficiency. At the same time automated data collection, transfer and import routines free time for more important tasks. Ardmore Shipping, a product and chemical tanker specialist, operates a fleet of seven vessels from 17,500 dwt to 50,000 dwt. Ardmore has recently taken delivery of the Ardmore Seavaliant, the first of its new-build series of four 49,999 dwt IMO 3 product and chemical tankers from SPP Shipbuilding in Korea, which have been designed to deliver the highest standards of fuel efficiency and operational performance. Numerous fuel-saving technologies have been integrated across Ardmore’s new build vessels, including larger and more efficient propellers, Mewis Duct and propeller boss cap fin devices for improved propeller and hull form efficiency, MAN B&W ME-B and ME-C electronic engines, as well as a high-performance hull coating. These technologies are anticipated to reap fuel savings of 10-15%. Each ship also holds voluntary EEDI certification by ABS. SkySails is also known as the developer of the kite wind propulsion of the same name. Its CEO, Stephan Wrage, said: “A vessel’s fuel consumption heavily depends on a range of factors, including operating conditions such as waves, wind and load, which can change dynamically during sailing. Whether the master and owners are looking for the most profitable speed, the most economical speed or the ETA speed for just-in-time arrival, our Performance Monitor collects the data and provides the real-time analysis that helps them to find the
WB summer 2013.indb 74
optimal operational settings, such as speed and trim. With the daily bunker bill being such a high proportion of vessel operating costs, Performance Monitor performs a critical role in maximizing efficiency and profitability, on the bridge and on shore, for each vessel and across the fleet.” voyager 4 passes sea trials
Maritime services company and Admiralty charts distributor Thomas Gunn says that sea trials of its new Voyager 4 on-board navigation data management system were successful and the new service was launched at the beginning of May. Thomas Gunn says that this latest version of the system will be the only chart updating tool to include global Navarea Warning information. It also provides a new route-planning tool to make it even easier to identify, update and download information needed for a vessel’s voyage as well as new time saving applications to help vessels navigate more safely and efficiently. For the trials, Voyager 4 was installed on a wide range of vessels operating around the world to ensure the new system is thoroughly tested in live environments. More than 20 vessels have been involved with trials, including USAC’s Hatta working out of Bahrain, Finner Shipping’s Red Fin, currently in Egypt, and Gulf Offshore’s Highland Eagle, based in Aberdeen. “Sea trials are an essential stage of our new product development programme. The Thomas Gunn Voyager team is made up of highly experienced mariners, navigators and technical experts, but at the end of the day it’s the experience on the bridge that determines our products’ success” said Mike Bailey, head of Product Development at Thomas Gunn. “Sea trials feedback is essential in guaranteeing reliability, ease of use and ensuring Voyager is designed and developed to meet real-life operational requirements.” Bailey said that the latest Voyager includes new services including Navarea Warnings service, the Admiralty Vector Chart Service (AVCS) and the Admiralty Information Overlay (AIO) viewer.
World Bunkering Summer 2013
as a Newport Piracy is by no means a new concept but in 1997 it News symposium on the topic pointed out an old trade. was more a question of new methods for
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» Early warning systems and prevention of unauthorised the through the communication boarding of warnings, evasive manoeuvres and the use of firearms when necessary. » Use of a safe room capable of housing ship personnel for up to 96 hours. The editor safe room also serves as a control Sandra Speares centre capable 527998 of controlling the QuTiatiasp “The (0) 1483 +44 time tel: eribustiur? is right ship’s course, to monitoring activity e-mail: on board the ship and communicating Dunt set some email@example.com a quibus binding with emergency niam, responders and rescue teams. » Procedures for adSAleS standards mAnAger qui sa veliatur security as more personnel to sam respond to a violent david Scott attack on board, aimed at preventing PMSCs eos eatur, e-mail: operate qui dia unauthorised with boarding and repelling firstname.lastname@example.org an attack on board the ship. unqualified quatio debit, personnel” quisit,
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Full speed ahead at Fujcon
The 8th International Fujcon reflected a rapidly changing Fujairah
he 8th International Fujairah Bunkering and Fuel oil Conference (Fujcon) held in late March was probably the best yet, certainly well up to the high standard of previous years. There was an air of continuity at Fujcon, partly because it was, as before, held at the UAE Hilton hotel. Also it was again organised by shipping and oil industry events specialist Conference Connection. On the other hand, there was getting away from the fact that Fujairah has changed massively during the years since Fujcon started. Fujairah is now a a booming modern city with good – and still improving, communications. Bunkering is still the mainstay, but by no means the only show in town. The emirate has been been building and diversifying its oil-based and maritime industries in an impressively well planned way. And it’s still developing rapidly.
In his welcome address, Dr Al Kindi referred to wide-ranging develops taking place in Fujairah. He noted: “Bunkering as we all know has been the catalyst for other fuel related Fujairah activities.” He mentioned the port will have storage facilities, principally for product, with a capacity of over 6 million m3 by the end of this year, rising to over 9 million m3 by the end of 2015. Then of course, there is the Abu Dhabi Crude Oil Pipeline (ADCOP) and storage project, which is now operational and has turned Fujairah into a significant crude oil exporting port. The day and a half of presentations that followed covered a wide range of topics with several recurring themes, the poor state of the shipping industry and the associated need to manage financial risk, the new impending 0.1% sulphur limits in the emissions control areas (ECA), the possibilities and, with some emphasis, the challenges of using liquified natural gas (LNG) as a marine fuel.
Recent and ongoing developments in the local scene were an important, though not dominant, feature in Fujcon which, once again, covered a wide range of topics of importance to the global bunkering industry. The first session opened with remarks by the co-chairmen of the conference Hussain Sultan, chairman, Neptune Energy Trading LLC, Dubai, and Mohammed Obaid Bin Majed Al Aleeli, directorgeneral, Fujairah Department of Industry and Economy. They both stressed major developments taking place in Fujairah and more broadly in the UAE. Dr Mohammed Saeed Al Kindi, the UAE’s former minister, environment and water who is now managing director of Fujairah Petroleum Products, has been central to Fujcon from the beginning and was still chairman of the event’s steering committee.
As ever, there were plenty of opportunities for networking, including at the excellent Tuesday night outdoor buffet dinner at the Shangri-la, always one of Fujcon’s high points. Fujcon finished with an optional harbour trip on Wednesday afternoon. That was well worth staying on for. The harbour has continued to expand while the vast array of vessels anchored off looked as impressive as ever. In addition the single point moorings serving ADCOP were in place. Unfortunately lack of time ruled out a visit to the port’s brand new control centre, although it had been described in some details by the harbour master, Capt Tamer Masoud, in his presentation. All in all, Fujcon 2013 fully live up to expectations. No doubt by the 9th Fujcon in 2015, there will many more changes to the dynamic port and emirate.
World Bunkering Summer 2013
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LEgAL NEWS ISTANBuL CONfERENCE
Bunkers at the Bosphorus Once again, players from across the international bunkering industry will be gathering in Istanbul to consider global and regional issues
he 6th Istanbul Bunker Conference is organised by the Turkish Bunker Association (TBA) and is being held at the Four Seasons Hotel Bosphorus on 5-7 June. Judging from its predecessors, the event will be wellorganised and attended, with strong support from the Turkish bunker industry. While the conference programme covers a lot of serious ground, there will be lighter moments, and the event kicks off with an Opening Cocktail Welcome Reception sponsored by the TBA. This year, a representative of the Turkish Oil Market Authority (EMRA) will be speaking at the conference for the first time. There will also be presentations on bunkering activities at two Turkish ports. Firat Yemeniciler of Poliport will present an update on Kocaeli Port, while Sami Habbab of Delta will report on developments at Ceyhan and Iskenderun. President of the Turkish Bunker Association, Ali Deniz Eraydın, will give the opening speech, setting out some of main themes. Eraydin has told World Bunkering that he sees several key issues for discussion. These are: the possibility of new emissions control areas (ECA) being set up in the Marmara Sea and Straits; the feasibility and costs of using LNG as bunker fuel; the implications of double hull bunker barges becoming mandatory in Turkey in 2016 and the need to keep investing despite the global economic crisis, Nigel Draffin, Technical Director of LQM Petroleum Services, will follow with a keynote address, setting the scene for the following sessions. The first of these looks at the current scene from a purchaser’s perspective. Jens Maul Jorgensen, Director of Bunker and Risk Management at Oldendorff Carriers talks about buying bunkers. He is followed by Julio Tellechea, Managing Director of Mabanaft who talks about Supplying bunkers – the story of acquiring the fifth largest bunker supplier”. In the following few sessions, commercial issues are to the fore. Among the speakers, KPI Bridge Oil’s Director of Risk Management, Christel Mcloughlin, explains how to remain profitable in a volatile market. Infospectrum’s Edgar Martin provides an insight into Credits in Bunkering.
After the serious matters of the day, a memorable evening is planned for delegates, starting with a boat tour and followed by dinner by the Bosphorus. The second day’s presentations are split into two distinct portions. The first part of the morning’s programme is focused on the Turkish market. This is followed by an overview of regulations affecting bunkering by IBIA Board member Trevor Harrison, Board Member, IBIA. The chairman of Delta Marine, Bülent Sener, takes a look at the possibility of LNG becoming a significant marine fuel. The closing remarks are provided by Jan Christensen, Vice President Physical Division, OW Bunker. The Istanbul Bunker Conference is now well known for its famous closing party, which lasts well into the morning. All in all, this event should once again be an opportunity for good quality discussion, useful networking – and some fun.
President of the Turkish Bunker Association Ali Deniz Eraydın
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World Bunkering Summer 2013
BuNkERINg IN ASIA
Time for reflection
IBC’s Bunkering in Asia event comes to Singapore this year, just as new regulation forces major change on the global industry
he 6th Annual Bunkering in Asia conChaired by Arjun Batra, Group Managing ference is being held in Singapore for Director – Maritime Advisors, Drewry Shipping the first time, from 24-27 June at the Consultants, the conference considers several Marriott Hotel. broad themes. The first is “Mega trends in Organiser, IBC says that the bunshipping and the impact on fuel” with MISC kering industry is going through exciting times. Vice president and Chairman of the Federation “Regulation, availability of fuels, price volatility, of ASEAN Shipowners Association Nordin Mat technology and LNG options are all having a Yusoff will present a keynote speech on “Global profound impact on us. How are we as an indusshipping markets and the Asian context”. try first going to adapt to the changing facets of There follows a shipowners roundtable on bunkering and then continue to thrive?” “Fuel efficiency and regulatory compliance – Bunkering in Asia will put the spotlight on strategies and solutions for global shipping”, Emission Control Area (ECA) compliance, qualwhich touches on several hot topics, including ity challenges, market outlook and shipowner improving vessel efficiency, ECA compliance perspectives on market directions. and LNG. On the panel will be Justin Gadbois, Nordin Mat yusoff Global sales of bunker fuel, IBC notes, are estiGeneral Manager of Sustainability –Asia Pacific, mated to be around 350 million tonnes a year and annual expenditure Maersk Line; Mikael Mattsson, Assistant Vice President Marine on bunkers is running close to US$2.6bn. As the industry continues to Operation, Star Cruises; and Morten Kristensen, Vice President evolve, markets are getting redefined and opportunities created. Strategic Fleet Procurement and Group Chartering, APL, with more The Bunkering in Asia conference is intended to be Asia’s key panellists confirmed soon. platform for marine fuel professionals to discuss and centre stage their The next broad theme looks at bunker trade forecasts and includes response to movement in prices, quality, commercial and regulatory an Asia bunker fuel market outlook with an overview of the present challenges, and at the same time develop their business. market and an assessment of supply and demand. Highlights include: The second day’s programme deals with three topics: Fuel quality • The changing face of shipping economics and sulphur enforcement; dealing with market trends; and risk man• Forecast on Asian markets and Singapore bunker trade trends agement – credit and finance. The day includes a P & I roundtable on • Global refinery investments and capacities for marine fuel “Dealing with claims in the new regulatory regime”. Panellists include • Shipowners roundtable: ECA Compliance Collin Fordham, General Manager, SEAsia Claims Services; Bazul • ECA compliant fuel availability and pricing dynamics Ashhab, Managing Partner and Head of Dispute Resolution, Oon and • Sulphur enforcement – learning so far Bazul LLP; Walter Dekkers, Managing Director, Van Ameyde Marine; • LNG fuel developments – availability, bunkering, ship design and and Joanna Meadows, Solicitor, North Insurance Management. long term viability By the end of the conference on Thursday afternoon, delegates will • P & I roundtable: quality claims management in the new era have had the chance to cover all the important issues currently facing • Fuel quality compliance – achieving better results through the industry. collaboration • Risk management – credit and finance for more information, visit www.bunkeringinasia.com
World Bunkering Summer 2013
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The LNG Bunkering conference in Singapore will give shipowners a chance to consider in some depth the pros and cons of using LNG as a fuel
ingapore is aiming to start liquified closely with key group of stakeholders and natural gas (LNG) Bunkering operasuppliers who are both interested and willing tions by 2014. It is currently finalisto invest in LNG bunkering.” ing licensing requirements for LNG The Singapore government has Bunkering while developing standard committed itself to LNG as part of its procedures, technical specifications and energy mix. In June 2009, it decided to take crew training. over the development and ownership of IBC’s LNG Bunkering conference will provide the Singapore LNG terminal and formed an update on what’s actually happening in the Singapore LNG Corporation (SLNG) to the region while exploring first-mover benefits develop, build, own and operate the LNG on making the switch on LNG, infrastructure, terminal. supply and pricing that makes this feasible. SLNG has recently procured Singapore’s The conference forms part of IBC’s first LNG shipment from Qatargas Operating impressive Singapore Bunkering Week line-up Company Limited (Qatargas). It is one of a and takes place at the Marriott Hotel from 24 number of cargoes that will be used to cool Morgen Schroeder Bech to 27 June, including pre- and post-conference down and commission Singapore’s new LNG programmes. Terminal, getting it ready for full and continuous IBC says: “The LNG bunkering industry is in its operations by the second quarter of this year. infancy, and the issue is hot. Gas prices are likely to fall further which As Singapore’s LNG market grows and develops, SLNG plans to look very attractive for powering ships.” explore new business opportunities and pursue its goal of becoming The conference organiser adds that, while the benefits of LNG a regional LNG trading hub. “Singapore’s location is a catalyst for power are well known, of primary concern is convincing the ship developing a vibrant LNG hub in the region,” says Rod Duke, director owner to invest in this. It notes that owners are faced with issues of of commercial operations, SLNG. supply infrastructure, economics, ship design, crew training and safety. Clearly the SLNG project bodes well for LNG bunkering in How, IBC asks, to break the chicken-egg dilemma in order to benefit Singapore and IBC says delegates will be able to get the latest update from a first-mover attempt? What’s the economic potential for LNG on LNG Bunkering time lines in Singapore. Bunkering? How can we ensure security of supply? What is the price? While there is a strong Singapore flavour to the agenda delegates Conference highlights, IBC says, will include discussions on: supply will also learn of experience in LNG from around the world, with the security and LNG pricing; issues to be considered when considering Danish Maritime Authority’s Head of Centre, Morgen Schroeder Bech, switching from conventional fuel to LNG; the availability of bunkering giving a European perspective and discussing Danish work on LNG for stations, capacities, flow rates and standardised bunkering practices; shipping as well as the North Europe LNG Infrastructure project. LNG infrastructure, field experience and bunkering guidelines; the How are regulatory authorities are planning for LNG Bunkering is incentives, funding and advantages of switching to gas; the costs of crucial importance. This area is covered by Roger Roue, Principal involved (CAPEX/ OPEX) in building LNG-fuelled vessels and Technical Advisor, Society of International Gas Tankers and Terminal emerging technical and commercial opportunities for LNG Bunkering Operators (SIGTTO). He will look at a number of regulatory-related The Maritime and Port Authority of Singapore has already shown issues including how to mitigate risks in LNG Bunkering itself willing to collaborate in LNG bunkering projects. Its Assistant for more information visit: www.lngbunkeringsg.com Chief Executive M Segar says: “MPA will continue to engage and work
World Bunkering Summer 2013
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yugBunkerService With its own storage and loading terminals and 13 bunkering barges, YugBunkerService is one of the leading fuel providers in southern Russia
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. 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 Rostovon-Don, Azov, Taganrog, Yeisk, Kavkaz, Temryuk, Taman, Saratov, Syzran, Samara and Astrakhan.
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 load-
ing 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 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.
Our team is pleased to offer you our experience and knowledge, best prices and an excellent service on a 24/7 basis.
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: email@example.com yeisk Tel: +7 (86132) 2-60-64 E-mail: firstname.lastname@example.org Port kavkaz Tel: + 7 (86148) 4-43-47 E-mail: email@example.com
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World Bunkering Summer 2013
Nayada From humble beginnings, Nayada is now a major player in the Russian bunkering industry
his year, Nayada celebrates its 15th anniversary. From its early days offering ship chandler services, the company is now one of the leaders in the far east of Russia’s bunkering industry. Today, Nayada operates the largest bunkering fleet in the region, with a total deadweight exceeding 20 000 tons, which means it can bunker 70,000-80,000 tons monthly. Moreover, such a large fleet ensures a smooth logistical operation, which means faster delivery of fuel to customers’ vessels. Due to the prime location of Nakhodka and Vostochny ports, there is growing demand for bunkering services from Asian-American container carriers. Their strict scheduling means as little time as possible needs to be spent undergoing bunkering operations. Nayada’s large barges are equipped with high capacity cargo pumps to ensure a swift, smooth service in these ports. Such a service means that we have received recognition and recommendation from the operators of some of the world’s biggest container companies.
Nayada’s 160 employees are the company’s golden asset. About 80% of them have been employed by the company for several years. Members of our tanker crews have extensive experience in the tanker industry, with many of them having worked in Russia’s Arctic zones and in the severe conditions of the Russian winters. Many have previously worked in some of the world’s largest tanker companies where they learned all about the high standards required by oil companies. By putting such high standards in place on our tankers, they have all been approved under Shell inspection. The company’s management team has a vast amount of experience in all spheres of the shipping industry, while the majority of employees have high marine education. This means any situation can be quickly assessed and the right action taken. Our team investigates and implements new technologies, rules and standards for constantly improving service and the quality of oil products. Nayada’s multistage quality control system is strict and progressive, with several leading shipping companies declaring that it is a strong element of Nayada’s service. The quality control system is involved in the production of blended oil types IFO30, IFO80, IFO120, LSFO.
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Technical characteristics of Nayada’s tankers • • • • •
MT Ostrov Russkiy DWT 7000 pumping rate 1000 m3/h MT Snabzhenets DWT 4600 pumping rate 700 m3/h MT Zaliv Amerika DWT 3300 pumping rate 400 m3/h MT Zaliv Aniva DWT 3300 pumping rate 400 m3/h M/T Atlant DWT 1200 pumping rate 400 m3/h
Nayada was the first company in the far east of Russia that initiated the production of low sulphur fuel oil (LSFO), which is required by vessels calling at North America ECA zones. The company has a full license and technology approved by the Russian Federation standards. Currently, Nayada produces and sells more than 5,000 tons of LSFO per month. In 2012, Nayada launched its agency department and also a general cargo logistics department, which enabled bunkering to transit vessels. As a result, there has been a large growth in the volume of bunkering operations. These days, Nayada’s monthly turnover is 70,000-80,000 tons, but our target is to reach 100 000 tons a month – which will soon become a reality due to the co-ordinated work of the Nayada team. Being just 15 years old, Nayada is continuously seeking to improve its offering and expand its horizons. So far, it has succeeded in supplying a diverse range of benefits, from ship agency services to the delivery of fuel oil by its own tank trucks. Nayada always aims for long-term co-operation with its partners and its trustworthy reputation is of paramount importance. The foundations of our company’s business are built on safety, quality and reliability, which are transparently reflected in our everyday activity.
5th floor, 3A, Portovaya Street, Nakhodka Russia, 692900 Tel/fax: +7 4236 629779, 679113 E-mail: firstname.lastname@example.org, email@example.com Website: www.nayada.biz
Port of Algeciras Bay Strategically located, Spain’s number one port is going from strength to strength
he Port of Algeciras Bay – Spain’s number one port – is located in an exceptional geo-strategic point. At the crossroads of the world’s main cargo shipping lanes, it sits in the Strait of Gibraltar in the West Mediterranean. The Port of Algeciras Bay has become one of the largest distribution centres in the region. Our traffic evolution over the past few years has allowed us to become one of the main Mediterranean ports, both in total throughput and container handling. In 2012, the Port of Algeciras Bay broke historical records by handling 88.6 million tons total throughput, as well as 4.07 million TEUs. In order to be able to meet the current traffic growth, the Port of Algeciras Bay Authority is continuing to develop new port infrastructure. New infrastructure at Isla Verde Exterior and Campamento has provided more than 200 hectares of new port surface area. Following a strict model of sustainable growth, the infrastructure has dramatically improved logistics at the heart of the main port in the Strait of Gibraltar, complemented by improvements to road and rail communications that include a new railway terminal that is able to lodge 700 metre-long trains. Total Terminal International Algeciras (TTI-A), a common user terminal, has operated the first phase of Isla Verde Exterior Container Terminal since May 2010. This semiautomatic container terminal has contributed significantly to the increase in the number of shipping lines calling at the port. Vopak Terminal Algeciras, a new oil storage terminal, already under operation since March 2013, with a total capacity of 403,000 cubic metres. There are currently nine double-hull bunker barges operating within the port waters. Ship supplies are among the main traffic types at the Port of Algeciras Bay. In 2012, more than 3.06 million tones of goods were
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supplied – 2.89 million of which were petroleum products. This service makes up part of a global range of services: fuel supply to vessels at berth and at anchor; ship repairs afloat or at dry dock; waste oil collection and treatment; lubricant supply, and so on. There is an exemption on port fees for anchorage “D” when calling for bunkering purposes. Ro-ro cargo is another pillar of the port’s strength. The proximity to Africa has given a leading role to the Bay of Algeciras, enabling it to serve as a sea-bridge between Africa and Europe. In 2012, 241,056 trucks and 4.8 million passengers crossed the Strait through our port facilities. 2012 MAIN TRAffIC fIguRES
TOTAL THROUGHPUT (tons):
BUNKER SUPPLY (Tons):
for more information, visit www.apba.es for more information about the Port of Algeciras Bay private operators, visit: bit.ly/algecirasoperators
World Bunkering Summer 2013
Transit-Dv A smooth bunkering operation is a given with Transit-DV
very season, the number of ships bunkered by Group Transit-DV has been increasing, as well as the amount of fuel provided. For example, this spring Transit-DV carried out eight bunkering operations with tankers Bukhta Slavyanka and Vladimir Vysotsky for foreign ships in the ports of Vladivostok, Nakhodka and Slavyanka, with a total volume of about 12,000 tons per day. Taking into account the capacity of the fleet raised, by 5 April it had accumulated around 28,000 tons of bunker fuel brand VB-180/VB-380. The remaining fuel volume had already been reserved by foreign companies for bunkering vessels in Primorsky region ports and this fuel was supplied within five to six days. Smooth operation
One example of a large bunkering operation was the bunkering of container ship Csav Petorca, owned by Chilean shipping company CompaĂąia Sud Americana de Vapores. Over 16 hours, Transit-DVâ€™s Vladimir Vysotsky supplied the container ship with 5,500 tons of fuel oil VB-380, produced by Vostokbunker JSC. To date, the concept of bunkering on the water has been successfully implemented by Transit-DV for bunkering vessels in the ports of Vladivostok, Vostochny, Kozmino, Nakhodka, Slavyanka, Zarubino and Posiet. For foreign partners, such an approach to the organisation of the bunkering business is extremely reassuring: the system, precisely arranged by Transit-DV Holding, allows confirmation to customers of the required volume and quality of fuel in a preselected port, by a certain bunkering ship, in the shortest time possible.
Igor Polchenko, president, Tranzit-DV
World Bunkering Summer 2013
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for more information, contact: 13 uborevicha Street, vladivostok, 690091, Russia Tel: +7 (423) 249-11-99 fax: +7 (423) 248-11-28 E-mail: firstname.lastname@example.org Website: www.eng.tranzitdv.ru
Morskoy Trust LLC
Neftehim Bunker Jsc
A fuelling company that is going from strength to strength
Always providing an outstanding service
stablished in 2007, Morskoy Trust LLC fuel supply company is based in the city of Petropavlovsk-Kamchatskiy in Russia. Its main activities are fuelling of fishing vessels operating in the Sea of Okhotsk and the Bering Sea, wholesale and retail sale of oil products in the Far Eastern sea ports, and oil transportation. The company operates 11 vessels, comprising eight oil carriers and three fuel vessels, with a total deadweight of 47,550 tons. All the companyâ€™s vessels are ice-class ships capable of operating in any navigation area throughout the year. They meet all the requirements of the Russian Register of Shipping and the latest requirements of MARPOL 73/78 â€“ International Convention on Marine Pollution. All vessels are equipped with heating cargo systems, which makes it possible to transport any oil products and they can carry several types of various oil products at one time. Morskoy Trust holds membership with the Russian Association of Marine and River fuelling companies. It has undergone strong growth in recent years, due to its constantly increasing number of customers, highly qualified staff and reliable business partners.
eftehim Bunker Jsc is an affiliate of the well-known and reputable oil product trader and bunker supplier, Neftehim Ltd, which has been operating since 2000. We maintain a reputation for reliably supplying the highest standards of services and excellent quality of products. Because of our outstanding business relations with the major Russian oil companies, as well as the independent oil producers, we are able to be very flexible in the market and always offer the best prices to our clients. Thanks to these extensive and stable relations, we always have the full range of residual products available. Furthermore, our marine gas oil is fully compliant with the latest international industry standards. Our company has access to the fleets of five different barging companies, giving us flexibility and efficiency in our bunker delivery operations. With growth in mind, we now have our own bunkerbarge, Severaynka, which was reconstructed on the Vyborg shipyard in accordance with the MARPOL regulation. Its cargo tanks have a total capacity for 1,000 mt of HFO and 260 mt of MGO. Quality control is a matter of great importance to us, so before a bunker delivery to the vessel we regularly engage a surveyor to test our fuel. In choosing Neftehim Bunker Jsc for your bunker supplies, you will always find outstanding levels of service, quality and efficiency.
Neftehim Bunker Jsc. Office 503 Bolshoy Avenue v.O. 80, lit. R St Petersburg 199106 Russia Tel: +7(812) 332 2363/+7 (812) 942-3140 Tel/fax: +7(812) 332 2364 E-mail: email@example.com Website: www.nh-bunkering.ru
Morskoy Trust LLC kAMCHATSkIy REgION Office 206, 37 vladivostokskaya str Petropavlovsk-kamchatskiy kamchatskiy krai, 683024, Russia Phone/fax: 8(415-2) 23-07-63, 23-29-04 E-mail: firstname.lastname@example.org
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Nizhegorod Bunker Ltd – going from strength to strength
izhegorod Bunker Ltd, the official representative of the oil company Rosneft, specialises in fleet bunkering in the areas of Volga and the adjacent basin. The company is extremely optimistic about the new navigation season, its reason for this being the strengthened relations with Rosneft and an ever-growing number of clients. “The task of expanding our client data base is constantly being worked on,” says Vladimir Nikiforov, general director Vladimir Nikiforov, of Nizhegorod Bunker. “At general director, the moment we are not only Nizhegorod Bunker successfully working with Rosneft, but have also concluded 200 new contracts for bunker supply, including one with Volzhskoye Parohodstvo. By the start of the navigation season we had received pre-payment for 3,000 tons of bunker fuel from our partners. This method has been used by our company for the first time and we see it as both a successful way of doing business and a demonstration of trust from our customers.” The fleet consists of a park of flat-bottomed tankers with a total capacity of 300 tons and self-propelled bunkering vessels with the capacity of 600-1,500 tons. The company also owns a stationary oil station. The total of bunkering fleet tonnage is more than 7,000 tons. In the recent years the company has increased its’ clientele from the North-West region of Russia. The bunkering spots in NizhniyNovgorod, Rybinsk and Sheksna are very handy and attractive to the shipowners of the North-West Shipping Company. “We always aim for an honest partnership,” says Mr Nikiforov. “The customer should be confident that he is buying exactly the type of fuel he is paying for. As a result of this strategy we have strengthened our position in the North-West region and won the trust of the shipowners from the capital. In the near future we plan to open bunkering spots at the mouth of Kama and Nizhnekamsk.”
Nizhegorod Bunker Ltd 13/2, Ilyinskaya Street Nizhniy Novgorod Russia 603109 Office Tel/fax: 00 7 831 434 4845 E-mail: email@example.com Website: www.nbunker.ru
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Portugal fuel stop
ased at Lisbon, Galp Energia Group, is able to offer fuel supply services to all ships visiting this warm and pleasant country. Galp Energia has professional bunkers team provide its customers with high-quality fuels and services, and the highest safety standards in all its bunker activity and the company’s bunkering products fulfil the ISO 8217: 2010 specification in all grades. To help achieve customers’ targets on the environment, the company can supply low-sulphur fuels at several ports, with the port of Lisbon being the main port for low-sulphur fuel. Optimising its logistics resources and storage capabilities Galp Energia is able to provide high-quality services and products, including a wide variety of marine distillates. Galp Energia is the main bunker supplier in Portugal, and provides bunker services using its two barges with capacities of 5,800 tonnes and 3,000 tonnes each. A 5,800 dwt double-hull barge, Bahia Tres, began operations in 2010 to support the company’s business in the ports of Sines and Setúbal, meeting all the important aspects for safety and protecting the environment. It is equipped with anti-pollution measurers and is covered by European Maritime Safety Agency regulations in the Atlantic Ocean and Mediterranean Sea. Always aware that its customers’ main concern is product cost, the company offers competitive prices without compromising product or service quality. Visiting Portugal and being supplied by Galp Energia will always be a good decision for regular customers, used to working with a professional team. We are the only refinery in Portugal and operate refineries at Sines and Matosinhos. We have an extensive product range that includes gasoline, diesel fuel, jet fuel, fuel oil, LPG, bitumen and several aromatic products. Our refining business is responsible for the supply of oil products to our retail, wholesale and LPG marketing divisions, competitors and foreign customers, as well as for the operation of our refining and logistics assets. We hold a significant position in the Portuguese crude oil products storage market. Our two refineries in Portugal together represent 20% of the Iberian refining capacity, and collectively account for the majority of Portugal’s annual domestic petroleum product requirements. We are investing approximately €1.4 billion to upgrade and improve the efficiency of our refineries, representing €1 billion for Sines and €0.4 billion for Matosinhos. .
for further information contact: galp Energia SA Tel: +3512 1724 0637/654 fax: +3512 1724 2957 E-mail: firstname.lastname@example.org www.galpenergia.com
Saudi Shipping & Maritime Service (Tranship)
Aditya fuels L.L.C.
Over the past three decades, leading oil products supplier Tranship has built up a strong reputation as a reliable operator
stablished in 1979, Saudi Shipping & Maritime Service – generally known as Tranship – is a leading oil products (bunker) supplier and trading company. Based in Jeddah, Tranship has successfully chartered out its future strategic direction and has established a reputation as a reliable supplier, with services rendered promptly at all times. Professional service
The company’s dedicated team of managers is ably supported by highly qualified and experienced staff, who are extremely motivated and devoted to working innovatively in the best interests of our customers. We have been licensed since we became established to operate as bunker suppliers at Jeddah, maintaining an excellent reputation among buyers, brokers and shipowners all over the world. So far, we have successfully distributed more than eight million tons of bunker fuel to clients’ ships over the past three decades. We currently have two oil tankers: MT Marwah-7 (4,999 tons DWT) built in 1991; and MT Marwah-6 (2,261 tons DWT) built in 1992. Both oil tankers are classed under the Japanese Classification Society (NKK). The tankers are equipped with the latest accurate electronic controlled dynamic blenders on board for blending all grades of CST to meet the exacting requirements of our valued customers. for more information, contact: Saudi Shipping & Maritime Services (Tranship) 3rd floor, Al Jawhara Building Madina Road, Baghdadiya Area, P.O. Box 7522, Jeddah 21472 kingdom of Saudi Arabia. Tel : + 966 2 642 4255 (4 lines) fax: +966 2 643 2821 E-mail: email@example.com www.ssmsc.com
A focus on quality and price ased in Dubai, Aditya Fuels L.L.C., part of the Aditya group of companies, offers fuels supply services to all ships visiting Dubai. The company supplies bunkers in Ajman, Mina Saqr, Sharjah Hamriyah port, Ras al-Khaimah port, Jaballi, Steven rock jetty, and Khorffakan. We have our own FO and MGO bunkering trucks and company storage tankers. We are aware of the importance of uplifting bunkers at the agreed time and place after all, ships need to be sailing, not standing idle. We carefully monitor the supply and keep our customers informed of progress, 24/7. Our company policy is based on three major factors: quality, quantity and price. All our products meet with the ISO-8217:2005 standard and we pay great attention to safety and environmental protection. We also supply, as per customer demand, ISO-8217:2010, including low and high sulphur fuel variants, as well as gasoil. It is our company policy to maintain strict quality of both fuel and services, to continually practice safe working procedures, and to protect the environment at every stage of the bunkering process. Additionally, we value highly the professionalism and reliability of all personnel who work for our company. Our current expectation is that demand will outstrip what we had initially anticipated. In order to facilitate this, the deployment of a barge will be necessary for supplies at outer anchorage, something which we hope to address in the next few months. The company aims to maintain its high profile, and continue to enhance its international image as a professional supplier of high quality bunker fuel. We value our clients and take good care of their bunkering needs. Looking to the future, our company is focused on further development to expand its activities and attract new clients and we are permanently ready to offer our services. N.v. Rambabu Managing Director Bunker Supplier ADITyA fuELS LLC PO BOx #18465 AJMAN- uAE Tel:00971 67489531 Mobile: +971551021780 E-mail: firstname.lastname@example.org E-mail: email@example.com ADITyA MARINE (East Cost India) 41-1-35, Rangayyanaidu street kakinada-533007, India Mobile: 91 9848257582 Tel: +91 884 2366717/718 E-mail: firstname.lastname@example.org ADITyA MARINE uk LTD Mrs Sasi Adapa Mobile:+44 7825152973 E-mail: email@example.com Website: www.adioil.com
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fT Maritime Services (fuel Trade)
gazpromneft Marine Bunker, Ltd
The Athens-based company provides a well-established global operation
Market leadership is our goal
T Maritime Services (Fuel Trade) was established in 2010 with the scope to provide the international shipping community with a high level of service in the area of worldwide bunkering and lubricants trading and broking. From the beginning of its operations, the company has been recognised as a trustworthy and reliable bunkers/lubricants trading firm. It has established credit lines with most of the international physical suppliers, both on bunkers and lubricants, throughout the world, as a result of professionalism, proper marketing tools and a proven record of timely payments. FT Maritime is actively trading in all geographical areas, but is particularly strong in the Mediterranean, North West Europe, West Africa and the Far East, where it provides – through an agreement with a Singapore-based supplier – deliveries not only in Singapore, but also in other countries such as Malaysia, Indonesia, Thailand, Vietnam and the Philippines. One of its recent activities is the delivery of bunkers and lubricants to yachts of any size to almost all the marinas in the Mediterranean Sea. Each member of the company’s management has more than 25 years of experience in the industry, assuring first-class service to its customers. The office is fully equipped with the most advanced tools, giving access to the most up-to-date market information that is essential to decision making. FT Maritime’s customer portfolio includes some of the most prominent names in the Greek Shipping community, as well as foreign owners/operators and charterers. Detailed market reports are sent on a daily basis to all customers, helping them to make the right decision when it comes to calculating voyage expenses or bunker replenishment. The trading team is available 24/7 and is ready to handle, in the most professional way, any bunkers lubricants requirement all over the world. FT Maritime currently has a total staff of 11, including management, trading, accounting, legal and administration. It is ISO 9001:2008 certified by Lloyd’s Register and a corporate member of the International Bunker Industry Association (IBIA). Its offices are in Glyfada in southern Athens.
for more information, contact: fT Maritime Services 1, zissimopoulou Str & Poseidonos Avenue 166 74 glyfada Athens greece Phone : +30 210 4293100 fax : +30 210 4293810 E-mail : firstname.lastname@example.org Website : www.ft-maritime.com
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azpromneft Marine Bunker, operator of Gazprom Neft’s bunker business, has acquired its first international asset, Marine Bunker Balkan S.A. (Romania), which operates in the Black Sea port of Constanta, from Unicom Holding. Marine Bunker Balkan S.A. manages two bunker vessels, one storage vessel with a capacity of 4,000 tonnes and two mooring barges, as well as leasing the Constanta Oil Terminal which has a capacity of 1,500 tonnes. Annual bunker fuel sales are expected to exceed 100,000 tonnes, resulting in Gazpromneft Marine Bunker becoming one of the largest bunkerage operators in the port of Constanta. Gazpromneft Marine Bunker plans to further expand its presence in Romania to the ports of Mangalia and Midia, with bunker fuel supplied from Gazprom Neft’s Russian and Serbian refineries. The Black Sea port of Constanta is one of the top ten largest ports in Europe and the third largest in the Black Sea region, with annual bunkerage of over 400,000 tonnes. Constanta is situated at the crossroads of trade routes from Europe to Asia and represents a key link in the strategic shipping corridor of the Danube river. Trade and shipping corridors in the region are being developed, which means that Danube river transit and vessel docking in Constanta are expected to grow by 1-2% per year through 2025. “The strategic objective of Gazprom Neft’s bunker business is to become a significant player in the international bunker fuel market. Gazpromneft Marine Bunker’s international expansion represents a key step in this direction. I am confident that the experience of working in the European market gained as a result of this acquisition, combined with our existing successful asset management in Russia, will further strengthen Gazprom Neft’s bunkerage position,” Alexander Dyukov, Chairman of Gazprom Neft’s Management Board commented.
for more information, contact: gazpromneft Marine Bunker, Ltd Bolshoy Prospect 80 block R, vasilyevskiy Island, St-Petersburg, 199106, Russia Tel: +7 (812) 449-49-70 fax: +7 (812) 449-49-71 E-mail: email@example.com E-mail: firstname.lastname@example.org Website: www.gazprom-neft.ru
Baltic Bunkering Company One of the leading players in the St Petersburg bunker market
he Baltic Bunkering Company was founded in August 1995. During these 17 years of trading the company has succeeded in creating a reliable and high-quality bunkering service and is now one of the leading players in the St Petersburg bunker market. Backed by a strategic alliance with Petersburg oil terminal (POT) (www.oilterminal.ru), the biggest oil storage facility in north-west Russia, as well as with the oil trading company PNT-GSM, Baltic Bunkering Company always has a good availability of the full range of high-quality fuel products. We supply high-quality bunker fuels, including low sulphur products. All fuels are transshipped through POT and are closely monitored and controlled in the POT laboratory to ensure that they meet ISO8217:2010 (E). The process of quality control starts before we purchase the fuel. We only buy fuels from refineries that have consistently provided a quality product over a long period. We have also introduced additional quality controls at the barge loading operations. The Baltic Bunkering Company owns 2 bunker barges - Alana (3,500 mt) and Pegas (1,000 mt). Quality is the cornerstone of our business and is guaranteed by the daily work of our skilled specialists. Baltic Bunkering Company is approved for ISO 9001 Quality System Certificate by Det Norske Veritas and is a member of International Bunker Industry Association (IBIA). We also pay special attention to the ecological aspects of our bunkering activities. In our practice, we strictly follow and observe the existing standards and rules prescribed for petroleum transshipping operations and the prevention of leakage of oil products. Among our competitive advantages are: • Full range of fuel oil products available, from IFO-30 to IFO-600; • LSFO is always available; • All products conform with ISO 8217:2010 (E) plus the later amendments; • Our own bunker fleet; • Prompt delivery of all bunker services; • Fuel deliveries conform with Regulations 14 (1) or (4) and 18 (1) of MARPOL 73/78, Annex VI, and Annex 1 and Annex 2 of SOLAS Regulation VI/5-1 (MSDS). for more information, contact: 48, Stachek Prospect, 198097 St Petersburg Russia Tel: +7 812 320 82 00 fax: +7 812 325 45 33 E-mail: email@example.com Website: www.bunkering.spb.ru Sales department: Tanya Sorokina, mobile: +7 921 905 70 63 E-mail: firstname.lastname@example.org Dmitry Elster, mobile: +7 921 965 87 83 E-mail: email@example.com
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World Bunkering AUTUMN 2013 ISSUE SPECIAL FEATURES: Independents Our annual review of the independent traders and suppliers. How are they faring in the current difficult market?
Fuel quality From worries about cat fines to concerns over compliance with sulphur content regulations, quality matters more than ever to the shipping industry. We take an in-depth look at the issues.
Lubricants There are very different views about what type of lubricant best answers the requirements of vessels moving in and out of emission control areas. We outline the arguments.
Geographical focus: Middle East Competition is increasing in the Middle East markets, although Fujairah retains its postion as the regionâ€™s dominant bunker hub. We report on developments at bunker ports around the region.
ARA Antwerp, Rotterdam and Amsterdam still collectively represent a massive bunkering hub. But how are new regulatory requirements affecting the market?
Scandinavia and The Baltic A round-up of the latest developments in this most environmentally aware of regions.
Event review Istanbul Bunker Conference
Event preview SUMMER
IBIA Annual Convention 2013 â€“ Hong Kong
News, views, analysis
Interview, Industry news, Environment, Testing, Risk management, Innovation, Legal news, Equipment and services, Diary
Fuel m ar Strait Grand anagement on Prince ss l Oi l m l LN G
ajo rs re vie w
st ra te gy ing up th e op tio ns ne ed su rveyor s an d flo wm et
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THE ONLY OFF MAGAZ ICIAL INE OF
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Looking ahead 22-23 May
1st IMarEST LNG Ship Fuel Technology Conference
Singapore Bunkering Week 2013
Antwerp Belgium www.imarest.org/events
5-7 June 6th International Istanbul Bunker Conference Istanbul Turkey www.istanbulbunkerconference.com
Incorporating: 4th Annual Asia Green Shipping Conference www.greenshippingasia.com Bunkering in Asia www.bunkeringinasia.com LNG Bunkering www.lngbunkeringsg.com
5-7 November IBIA Annual Convention 2013
Hong Kong www.ibia.net
4-7 June Nor-Shipping
Oslo Norway www.messe.no/en/nor-shipping
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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: Saint-Petersburg, Kaliningrad, Murmansk, Archangelsk, Novorossisk, Tuapse, Port Kavkaz, Nakhodka, Vladivostok, Vostochnyi, Sakhalin island, Olya, Samara, Moscow, Sheksna • Main River Ports of operations: Saint-Petersburg, Yaroslavl, Kazan, Volgograd, Rostov-on-Don, Astrakhan, Azov, Ust-Kut, Nizhniy Novgorod, Kozmino, Primorsk, Taman, Ust-Luga • International ports: Tallin, Riga, Klaipeda, Rostok, Konstanca
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The fuTure is in our hands! GAZPROMNEFT MARINE BUNKER Bolshoy Prospect 80 block R, Vasilyevskiy Island, St-Petersburg, 199106, Russia Tel: +7 (812) 449-49-70 Fax: +7 (812) 449-49-71 E-mail: firstname.lastname@example.org E-mail: email@example.com
Total Marine Fuels Private Limited. Photo credit: Eric Houri.
YOUR SUCCESS FUEL!
Visit our website www.marinefuels.total.com
Worldwide physical supply: Abidjan • Antwerp • Caribbean • China • Dakar • Donges • Fiji • Fos • Freetown Hamburg • Houston • Korea • Le Havre • Reunion • Madagascar • Maputo Mauritius • Morocco • Mumbai • Papeete • Pointe-Noire • Singapore…
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