Gard : Bunkers and Bunkering

A selection of articles previously Bunkers and published by Gard AS Bunkering 2

Introduction...... 4 Bunkers contracts...... 5 Low-sulphur fuels explained...... 6 USCG detains vessel for failure to use low sulphur fuel oil in the North American ECA...... 7 Turkey – New requirements for fuel oil sulphur content...... 8 Fuel handling and treatment on board...... 9 EU – de-bunkered off-spec fuel is not waste...... 10 Bunker Sampling...... 11 Bunkers and bunkering - It’s nothing to do with your golf swing ...... 12 Fines for burning non-compliant fuel in EU ports...... 15 California low sulphur fuel changes 1 January 2014...... 16 North American ECA requirements after 1 August 2012...... 17 Canada implements North American ECA requirements...... 18 Hull and machinery incident - Consequences of using off-specification bunkers...... 19 The importance of an efficient fuel oil treatment system...... 20 Marpol Annex VI - New risks and challenges for owners and charterers...... 22 Marpol Annex VI - Solving the low sulphur issue...... 25 Marpol Annex VI – Challenges in operating on low sulphur fuel...... 27 Off-spec bunkers – Some practical cases...... 28 Controlling bunker costs...... 30 Liquid gold - Fuel oil and lubricating oil...... 36 Bunker Quality...... 38 Some technical aspects of marine fuels testing...... 39 Effects of off-spec bunkers...... 42 Main Engine Damage Due to Ignition Delay...... 44 The interplay of fuel and lubricating oil quality on the reliability of diesel engines...... 45 Bunker spills...... 47 Charterer’s Liabilities and Bunkers...... 50 P&I incident – How not to do it – Bunker operations...... 51 Stone cold bonkers – FD&D bunker disputes...... 52

Disclaimer

The information contained in this publication is compiled from material previously published by Gard AS and is provided for general information purposes only. Whilst we have taken every care to ensure the accuracy and quality of the information provided at the time of original publication, Gard AS can accept no responsibility in respect of any loss or damage of any kind whatsoever which may arise from reliance on information contained in this publication regardless of whether such information originates from Gard AS, its shareholders, correspondents or other contributors.

This booklet contains a collection of 3. If the supplier takes other samples 9. Expert advice should be considered loss prevention materials relating to at the time of the delivery, try to and a reliable fuel testing services bunkers and bunkering, which has been establish how and when they were such as DNV Petroleum Services published by Gard over the years. taken. Issue a protest if you are not (DNVPS) or Lloyds Register (FOBAS) invited to witness the sampling. should be used to obtain advice on Problems occurring onboard the how to proceed in order to solve vessels and which arise from bunker 4. Use a fast, reliable testing service to the particular problem and to avoid related issues are diverse, and may analyse the samples. damage and mitigate any losses. involve disputes varying from engine/ equipment problems and vessel delay 5. Segregate new fuel from that 10. Contact the engine manufacturer as to off loading/re-bunkering. Main already held onboard. well as the fuel supplier for advice. and auxiliary engine related claims Further action will depend on which constitute approximately 31 per cent of 6. Avoid using new fuel until the parameter is off-specification and/or Gard’s total hull and machinery claims. analysis results have been what the particular problem is. The This figure should also be compared considered and it has been degree of quality deviation from the with statistics from the industry established that the fuel is suitable. specification must be considered. indicating that 80 percent of all engine breakdowns are related to problems 7. Maintain accurate daily records of 11. The charterer should be notified, with either the fuel or the lubricating oil. the contents of and consumption if the charterer purchased the fuel, from each fuel tank and other interested parties. As with most claims, bunker related claims can be avoided. The following If off-spec bunkers have been 12. The parties should inform their points may serve as a reminder and delivered and are found to be insurers. assist in ensuring a claim free voyage. unsuitable for use the bunkers should be off-loaded and replaced 1. Be selective when choosing a by new on-spec bunkers. If inferior supplier. Order fuel to desired ISO bunkers have to be used or have grade and describe the required already been used the following grade in the charterparty as well as should be done: in the requisition to supplier. 8. The vessel should immediately 2. Take samples at the time of delivery notify the shipowner if it is and obtain confirmation from the experiencing problems with suppliers that the samples are off-spec fuel. If the shipowner representative. Ensure that the purchased the fuel directly from samples taken are properly labelled. the supplier, he should notify the bunker supplier and forward a copy of the test results.

Gard News 204, November 2011/ Bunkers contracts January 2012

Gard News looks at some of the issues days after delivery. The time limit for Insurance regarding contracts for the supply of producing claims in respect of quality Most insurance contracts provide that bunkers which may affect shipowners is normally 30 days, with very strict the cover may be prejudiced if the and charterers. procedural steps to be followed by the assured has waived his right to claim buyer. damages from third parties. However, Contracts for the supply of marine this does not normally apply to bunkers may give rise to a number Limitation of liability contracts which are considered “usual” of challenges to owners, charterers Contracts normally contain limitation of or “customary” in a trade. Hence, as and sellers of bunkers. A close study liability provisions whereby the sellers’ long as the contract entered into may of these contracts will reveal onerous liability is limited to the price charged be considered “usual”, insurance cover liabilities and responsibilities put on the under the contract or the cost of should not be prejudiced. buyers, be they charterers or owners. removal of the relevant bunkers. Conclusion Contracts relating to sale of bunkers Not surprisingly, liability for Charterers and owners should carefully often include provisions of a general consequential losses and personal consider all provisions before signing a nature, which apply to all dealings injury are usually excluded. In addition, bunkers supply contract. This may help between the parties and may well be some contracts provide that any claim to avoid unpleasant surprises. given priority over other contracts. against sellers will be deemed to Affiliates of the sellers may also be be abandoned if the sellers are not affected by the general conditions even provided with bank security for costs. if the buyer may not be aware that a company selling bunkers is an affiliate. Spill during bunkering Contracts may have clauses regulating Quality and quantity spillage and if they do the sellers Quality may be defined as sellers’ will normally be authorised to take commercial grades offered to whatever measure they deem necessary customers at the time and place of to minimise damage. Costs will be delivery. However, contracts often paid by the party causing the spill or contain provisions like “the seller apportioned according to blame if both makes no warranties of quality except parties are at fault. for being sellers’ commercial grades at the time and place of delivery”, or “the Lien seller does not provide any guarantee Certain bunker supply contracts nor warranty as to the satisfactory provide that the sellers “shall have quality, fitness or suitability of products the right to assert a lien against the provided”. Such provisions may cause vessel covering the fuels delivered”, difficulty if a claim for quality is to be regardless of whether the buyer is pursued. the owner or charterer of the vessel. By accepting this clause the charterer Contracts may also provide that would give a third party a contractual bunkers to be delivered shall be lien on property they do not own. The determined by the sellers’ preferred legal implications of such a clause are method of measuring and that the unclear. buyer will be charged according to the measurements taken by the seller. The Indemnity clauses buyers are often encouraged to have an Certain contracts contain an indemnity independent surveyor present during clause stating that the buyer shall measuring. However, contracts may indemnify the sellers for “any and all include clauses such as “determination costs, claims demands or liabilities, of quantity shall be made solely by the damage to property or personal injury... seller”. unless the same is due to the sole negligence of the seller”. Any incident Time limits not caused solely by the negligence Claims in respect of bunkers delivery of the sellers may therefore trigger usually have very short time limits and liability to indemnify. Some contracts often there are different time limits for may stipulate that the sellers’ liability quantity and quality claims. According is limited to damages and costs to many standard contracts, claims caused by gross negligence or wilful for short delivery are time-barred 15 misconduct of the seller.

Gard News 209, February/ Low-sulphur fuels April 2013 explained

Why is there a drive towards the use of are saleable commodities. The recovery is highly reactive and can reduce low-sulphur fuels? process is highly efficient, with a typical the lubrication properties of diesel, recovery rate of 99 per cent. a significant problem for rotary Whilst shipping, with relatively low injector pumps which use the diesel CO2 emissions compared with other Not all crude oils extracted from the for lubrication. Varying levels of forms of transport, is regarded as ground are identical. Crude oil is made hydrotreatment result in the lubrication the most energy-efficient means of up of many different hydrocarbon properties of diesel varying, depending mass transportation, the global trend components, ranging from light ends on the location of the refinery or the towards reducing emissions from all (aromatic hydrocarbons) to the heavier source of their crude oil. industry sectors has led to recent ends (non-aromatic – oily). There are calls to improve energy efficiency many forms and within those forms Acid rain and control emissions in international there are many different compositions. Sulphur, when burnt in air, converts into maritime transport. Shipping is In the traditional crudes there is a large sulphur dioxide (SO2), which, when becoming recognised as one of the difference in viscosity and sulphur released into the atmosphere, can form most significant sources of localised content. The more viscous oils tend to an acidic solution, dissolving in rain to air pollution and acidification in the contain significant amounts of heavier form acid rain. This causes widespread European Union. A significant element ends, having a lower API1 gravity and damage to the environment, affecting of the pollution from shipboard sources higher sulphur content, whereas the lakes and forests, and has been blamed has been identified as being from the less viscous oils are predominantly for erosion damage to buildings and flue gas emissions containing sulphur made up of the lighter ends and have structures of historic importance. dioxide (SOx). a lower sulphur content. The heavier the crude, the greater the expense Although acid rain is so weak as not to Some major players in the shipping to extract usable components. It is cause immediate danger, a prolonged industry have already taken the initiative possible with some very light sweet build-up does have significant effects of switching to low-sulphur fuel and crudes to burn them directly in diesel on forests, causing the nutrients in the investing in finding alternative sources engines without any significant soils to dissolve and be washed away. of “green” fuel. processing. Crude oil extracted from The release of aluminium into the soil, the ground is classified as sweet or which blocks the trees’ ability to absorb But why is sulphur such a villain? sour, depending on the level of sulphur nutrients, and the washing of the tree naturally occurring in the crude. High leaves’ natural waxy deposits, restrict Origin concentrations of sulphur dictate sour their ability to perform photosynthesis. Sulphur (brimstone) is a naturally crude, while low levels are indicative This combined attack can leave trees occurring element and is found freely of sweet crude. Commercially, sweet open to disease and damage by insects within the earth’s crust and is essential light crude has been preferred and and weather. Minor changes in the to life, forming a constituent part of therefore these resources have been PH levels of rivers and lakes can affect body fats and bone. It is from here consumed at a far greater rate than the some species while not affecting others, that sulphur finds its way, through the less commercial heavier sour crudes. causing very intense plankton blooms, passage of millions of years, into the However, in the future, refineries will which go on to form very deadly toxins. earth’s supply of crude oil. Most of the need to use the heavier crudes as oil supply is found between layers of supplies of the light crudes diminish. The relationship between acid rain, sedimentary rock, this being formed As the supply of light sweet crude has pollution and fossil fuels was first by the layering of sea bed deposits progressively declined since 2000, discovered in 1852 by Scottish chemist and free organic material settling. The the demand has increased and this Robert Angus Smith, but it was not industrious work of anaerobic bacteria has been matched by the increased until the middle of the 20th century consumes the free organic matter requirement for low-sulphur fuels. that the first significant steps to control converting it into simple hydrocarbons air pollution were taken, gradually with the leaching of sulphur from the Why is sulphur undesirable in fuel? progressing into the current focus on surrounding rock, resulting in crude Sulphur has several undesirable shipping emissions. oils having varying degrees of sulphur properties when combined with content. the internal combustion engine. It Footnotes is acidic in nature, which can result 1 American Petroleum Institute. Extraction in the corrosion of the constituent 2 A catalytic converter is a vehicle There are several methods for metal parts, and is known to poison emissions control device which converts extracting sulphur. The cheapest and catalytic converters,2 i.e., to reduce toxic by-products of combustion in most widespread is hydrotreatment, catalytic activity, thereby reducing the the exhaust of an internal combustion a process that involves treating the effectiveness of exhaust systems. engine to less toxic substances by way product with hydrogen. The removed of catalyzed chemical reactions. sulphur is often in the form of H2S and Extraction of sulphur through must be converted into either elemental hydrotreatment involves treating the sulphur or sulphuric acid, both of which sulphur with hydrogen. Hydrogen

Gard has recently been advised that • For Gard’s specific advice on EPA have compiled a joint list of the United States Coast Guard (USCG) operation in the North American ECA, FAQs and associated responses as a included in its list of IMO reportable we refer to our previous Gard alert: result of queries received since the detentions, which is part of the US “North American ECA requirements implementation of the North American Port State Control (PSC) program, after 1 August 2012” dated 4 July 2012. ECA. At the end of the document is the detention of a foreign bulk carrier a list of questions received which are for using fuel oil exceeding the 1.0% • Further to the details provided in currently under review by the USCG/ sulphur limit content whilst operating our previous Gard Alert regarding the EPA. within the North American Emission submission of “Fuel Oil Non-Availability Control Area (ECA). According to the Reports” to the Environmental Footnotes report published on the USCG website, Protection Agency (EPA), Members 1 The requirements for the North the vessel had low sulphur fuel available and clients should note that a new American area as an ECA under on board for use, but neither the Master electronic portal has been launched by MARPOL Annex VI took full effect on 1 nor the Chief Engineer was familiar the EPA through which vessel owners August 2012, while for the United States with the current North American ECA and operators can electronically Caribbean Sea area, the requirements regulations, and the compliant fuel was submit a disclosure of fuel oil non- shall take full effect on 1 January 2014 therefore not used.1 availability. The electronic portal is (ref. also IMO MEPC.1/Circ. 756). managed through the EPA’s Central 2 For Gard’s advice concerning fuel The referenced incident clearly Data Exchange (CDX) and instructions changeover procedures and fuel indicates that not all Masters and on how to access the electronic portal oil treatment in general, see Loss Chief Engineers are fully aware of is available through the following URL: Prevention Circulars No.15-09 “Low their responsibilities under MARPOL http://www.epa.gov/enforcement/air/ sulphur changeover” and No.05-12 Annex VI and the requirements when marpolannex.html#fueloil “Fuel handling and treatment on operating in ECAs. Gard’s Members board” and clients are therefore strongly • In addition, useful information for advised to make sure that their Masters ensuring compliance with the North and relevant crew are properly trained American ECA requirements can be and familiar with all air pollution found in the document “Frequently prevention requirements within their Asked Questions about the North areas of operation - and with their American ECA by USCG“ which shipboard procedures concerning use is also accessible via the EPA URL of compliant fuel oil in particular.2 included above. The USCG and the

As part of the measures implemented by local regulators and Gard has been Directive for the sulphur content of to prevent and reduce air pollution, advised that as of 1 January 2012, marine fuels and of MARPOL Annex VI. MARPOL Annex VI sets out the Turkey will enforce new regulations requirements for the sulphur content covering the limits of the sulphur Based on information published by the of any fuel oil used onboard ships in content of marine fuels used by vessels Turkish Chamber of Shipping and the general and for the Emission Control within its domestic territorial waters. Turkish General Directorate of Marine Areas (ECAs) in particular. However, The purpose of the new regulations Transport in September 2011, the new stricter regulations covering the sulphur is reportedly to align these with the Turkish requirements are: content of fuel oil may also be enforced requirements contained in the EU

Effective date Type of vessel and operation Sulphur content limit required All vessels arriving at Turkish ports and Marine fuels at or below 0.1% sulphur 1 January 2012 all inland waterway vessels sailing on Turkish inland waters

All passenger vessels providing regular Marine fuels at or below 1.5% sulphur services in areas covered by Turkey’s marine jurisdiction

It has also been indicated that Turkish and artificial lakes, reservoirs, fisheries According to Gard’s correspondents, flagged vessels, when sailing within and rivers of Turkey; the Turkish Straits, information about the new fuel “SOx Emission Detection Fields as the Bosporus and the Dardanelles, and regulations has not been readily defined by the International Maritime the Marmara Sea are reportedly not available and there is no clear indication Organization” cannot use marine fuels part of this definition. However, it has of how the Turkish authorities will with a sulphur content exceeding been indicated that vessels transiting interpret them. Prior to entering Turkish 1.5%. Assuming that this refers to the the Turkish Straits may still be subject territorial waters, Members and Clients ECAs defined in MARPOL Annex VI, to the new regulations if their stay at should also check with local sources Members and Clients should be aware an anchorage whilst awaiting passage and/or their local agents whether there that the requirements of MARPOL exceeds 2 hours. is any additional or new information Annex VI, i.e. the use of marine fuels at available from the authorities. or below 1.0% sulphur content within • There are currently no detailed ECAs regardless of flag, will prevail. indications as to how the Turkish We would like to thank Gard’s authorities intend to follow-up the new correspondents in Turkey, Kalimbassieris Gard’s correspondents in Turkey advise regulations and what the consequences Maritime Ltd and Vitsan Mümessillik that, to their knowledge: will be of contravening the regulations. ve Musavirlik A.S., for the above information. • The regulations apply to all vessels Gard’s Members and Clients trading to safely at berth or at anchor within the Turkey should ensure that their vessels boundaries of any port, and staying comply with the new Turkish regulatory at berth or at anchor for more than 2 requirements by 1 January 2012. It is hours. Fuel replacement operations important that operators specify, and must take place in the shortest possible crew members verify, that the sulphur time following the vessel’s arrival in level in the bunker delivery note port. conforms to ISO 8217 and is within the sulphur limits set by local regulators • “Inland waters” means the natural and MARPOL.

Loss Prevention Circular No. Fuel handling and 05-12 treatment on board

Introduction is considered especially important to fuel during critical operations or when Fuel-related engine breakdowns emphasise this advice to new crew navigating in restricted areas. are not a new problem. Between members and junior engineers. For storage and combustion, the fuel further information and additional • Consider if bunkering upon entering must be transferred, heated, filtered details on practical cases and important a port is an option (draft, cargo, timing, and purified in order to meet the learning points, please see the Loss etc., permitting) instead of when engine manufacturer’s specifications. Prevention Compilation: “Bunkers and leaving a port. This will allow analysis Depending on the quality of the bunkering”. of the new fuel to be available prior fuel delivered on board, this can to leaving port, which of course is the be a complex process and Gard Fuel oil storage and tanks ideal situation. regularly sees engine breakdowns and Even if fuel is within specification, operational problems caused by poor problems can arise at the very Fuel oil separation fuel quality or poor fuel treatment first stage of storage. Build-up of Even if the HFO received complies on board. The bulk of such engine sediment inside the tanks can cause with the requirements of ISO 8217, breakdowns arises from the use of contamination of new fuel and mixing operational problems can arise if heavy fuel oil (HFO) and the number of different batches of fuel can lead to the treatment plant and in particular of cases where engine damage is unstable fuel. Important precautions the HFO separators are not properly caused by catalytic fines seems to be are: operated and maintained. In order to in the majority. Gard has also seen efficiently reduce the level of catalytic engine problems caused by mixing of • Regularly clean storage and settling/ fines and other impurities present incompatible fuels and filters clogged service tanks. Large particles will settle in the fuel, such as rust, sand, dust by sludge. in the tanks and these particles can be and water, separator manufacturer’s whirled up during rough weather and recommendations should be followed. The purpose of this circular is to remind supplied to the separators, sometimes Important precautions are: ship owners and operators of important in concentrations above the limits issues regarding fuel handling and set out in ISO 8217.2 Cleaning of • Keep the HFO inlet temperature at treatment on board and to highlight fuel oil tanks is often only performed 98oC. The efficiency of the separators the importance of structured training of during scheduled yard stay and is dependent on the inlet temperature crew members to prevent operational the implementation of routines for of the fuel and even a small reduction problems and engine damage. more frequent cleaning should be in temperature will reduce the quality considered. of the separation. Some commonly Changes in rules and regulations observed causes of failures are leaking The drive towards the use of low • Regularly drain settling/service tanks heating coils, wrong set points for sulphur fuel oils (LSFO)1 is causing to remove water and sludge, preferably temperature sensors and defective fuel refining processes to change, on a daily basis. monitoring systems. sometimes resulting in lower quality HFO being delivered to ships. More • Place new bunkers into empty tanks • Use the correct flow ratio and gravity blending of different oil components whenever possible. Be aware that disc. The longer the fuel is in the to optimise sulphur content may mixing of two stable fuels does not separator, the better the cleaning of the create side effects such as instability, guarantee a compatible mixture and fuel oil will be. For separators without incompatibility, ignition and combustion the sediment potential can increase gravity discs, it is recommended to difficulties and an increase in the levels drastically after mixing. always use all available HFO separators of catalytic fines. The need for frequent and to run them in parallel, with changeovers between different types of • If mixing cannot be avoided, carry a corresponding feed rate. If the fuels clearly increases the opportunity out tests to ensure that the two types separators are of the manual type with for errors. Therefore, it is very important of fuel are compatible. Use a fast, gravity discs, they must be operated that the crew be familiar with the reliable and recognised testing service in series with a purifier followed by a properties of the fuel supplied and the to analyse fuel samples and avoid using clarifier, but with the lowest possible limitations of the particular ship’s fuel the new fuel until the analysis results flow. On this type of separators, the use treatment plant. have been reviewed. Carefully adhere of correct gravity discs is crucial and the to the recommendations provided with discs have to be changed depending Gard has issued a series of the results from the test laboratory. on the density of the fuel used. recommendations previously but, because of changes in rules and • Where time is a critical factor • Maintain the separators according to regulations influencing both the quality but there are doubts about the manufacturer’s instructions and, as far as of available fuel and the operating compatibility and sediment potential practically possible, use manufacturer’s procedures on board, it is important to of a mixed fuel, carry out the simple approved parts only. In addition, the reiterate some of this guidance. Below on-board test (test kits for this purpose separators should be checked by is a summary of Gard’s advice on fuel should be available on board) as a the manufacturer’s service engineers handling and treatment on board. It minimum, and avoid using the mixed at regular intervals. One commonly

© Gard AS, January 2014 10 observed causal factor for failure is HFO and low sulphur distillates, or even Footnotes incorrect assembly of the separators marine gas oil (MGO), can be high and 1 Permissible levels of sulphur oxide after cleaning. requires increased awareness. (SOx) emissions are regulated via IMO’s MARPOL Annex VI and various • Verify the efficiency of the separators Conclusion domestic regulations. The sulphur and the cleanliness of the service tank For the safety of the crew, ship and content limit for LSFO allowed by sampling the fuel in the system cargo, and to minimise costs and therefore depends on the location of before and after the separators and periods off-hire caused by engine the ship and the regulations in force as close to the engines as possible. breakdowns, it is important that ship at the time. At the time of writing, Send the samples in for analysis by a owners and operators focus on the the maximum sulphur limit of fuel oils recognised laboratory. Verification of quality of fuel handling and treatment used outside emission control areas separators should be carried out at on board. All engine crew must receive (ECAs) and other designated areas least once per year. proper and regular training and it is is 3.5%, while inside ECAs the limit is particularly important to ensure that 1.0% (ref. IMO MARPOL Annex VI). Fuel changeover junior engineers become familiar with Identified designated areas other than Ships that trade between areas with the ship’s fuel treatment equipment and the MARPOL ECAs are: EU Community different sulphur limitations should how to perform regular maintenance. ports (0.1%), Turkish ports (0.1%) and have detailed changeover procedures. California coastal areas (1.0% for marine Insufficient knowledge of the actions Changes in rules and regulations may gas oil (MGO) and 0.5% for marine required in a given situation may lead to changes in procedures so diesel oil (MDO)). result in engine failure, so changeover training and facilitation of experience procedures should be practised before exchange are essential for the crew to 2 ISO 8217 specifies the requirements entering restricted waters, especially be able to detect the cause of a fuel- for petroleum fuels for use in marine in ships that do not perform fuel related problem when it occurs, and engines and boilers prior to appropriate changeovers on a regular basis. The adjust the fuel handling and treatment treatment before use. risk of incompatibility when mixing procedures to minimise potential losses.

EU – de-bunkered off- Gard Alert, 20 January 2014 spec fuel is not waste

A recent guiding ruling from the Court interpretation has resulted in a number market. However, the Dutch authorities of Justice of the European Union (CJEU) of criminal investigations and cases decided that this oil should be treated states that off-spec oil need not be against bunker providers for failure as waste and pursued Shell for criminal handled as waste. to follow environmental regulations fines. when de-bunkering fuel that did not meet contract specifications but was As previously reported (see Gard Alert The CJEU found that the buyer’s nonetheless suitable for reconditioning “De-bunkering in The Netherlands” rejection of the cargo as off-spec and resale. dated 26 January 2012) there have under the sales contract was not been some uncertainties regarding decisive and held that “a consignment the Dutch authorities’ interpretation of The recent CJEU ruling followed an of diesel accidentally mixed with the EU waste legislation and at what appeal by Shell Nederland and Shell another substance is not covered time bunker fuel not compliant with Belgium against a prior ruling by the by the concept of ‘waste’, provided the stated specifications (off-spec fuel) Dutch environmental authorities. The that the holder of that consignment is to be considered as waste. Current case concerned contamination of does actually intend to place that regulations define ‘waste’ as “any a parcel of ultra low sulphur diesel consignment, mixed with another substance or object which the holder (ULSD) with remnants of MTBE. As product, back on the market.” discards or intends or is required to a result, the flashpoint became too discard” and Dutch environmental high and the ULDS was considered Members and Clients are advised to authorities have in some instances off-spec by the buyer. Shell agreed to take note of the recent ruling by the interpreted this statement to mean that refund the purchase price and take the CJEU when considering options for if a buyer rejects a parcel of fuel oil, the parcel back and transported the oil to de-bunkering and reconditioning of oil must be considered as ‘discarded’ the Netherlands with the intention of off-spec fuel in the Netherlands. For and accordingly treated as waste. This blending it and placing it back on the further information on this the particular Shell case, please see CJEU Case No.C- 241/12.

Introduction and background labeled. If the supplier takes other • Expert advice should be obtained Gard is frequently involved with samples at the time of delivery, try to from a reliable fuel testing service as to machinery damage/claims related to establish how and when they were how to proceed and how to solve the fuel quality. The purpose of taken. Issue a protest if you are not particular problem. Contact the engine this circular is to emphasise the invited to witness the sampling. manufacturer as well as the fuel importance of the fuel ordering, supplier for advice. Further actions delivery procedures, bunker • One sample should be retained to be taken will depend on which delivery receipts and bunkering on board the ship, another should be parameter is off-specification. samples including the correct retained by the supplier, and a further procedures for taking and handling of sample may be used for analysis Recommendations the samples. purposes and a fourth may be held by Bunkering procedures, including fuel- a responsible independent party for testing procedures and charter party Reducing the risk safe keeping and reference in case of a requirements to fuel quality, should To reduce or minimise the risk of claims dispute. be reviewed to ensure that the correct arising or breakdown of machinery, procedures are followed when dealing there are some main • Bunker fuel samples should be sent with off-spec bunkers. The shipowners issues to be aware of when handling to the laboratory for testing as soon as should also familiarise himself with bunkers. possible after completion of bunkering. any recommendations issued by class Use a fast, reliable testing service to societies or any other experts. The • Fuel sampling and analysis is analyse the samples. Segregate any crew involved should also be properly essential for verification of the quality of new fuel from that already held nboard. briefed on these guidelines and the fuel received onboard. Procedures Avoid using the new fuel until the procedures to avoid costly and time and instructions should be established analysis results have been considered consuming interruptions. Gard strongly within the technical or operational and it has been established that the fuel recommends that bunker sampling and departments to ensure correct sampling is suitable. Maintain accurate daily testing should be carried out in and stating where the samples should records of the contents of and accordance with correct procedures. be sent for analysis. It is important to consumption from each tank. The lack of testing can lead to extensive ensure that the engineers on board damage to the vessels machinery and technical staff ashore understand which is costly for all involved. can the results of the analysis and the Off-Spec bunkers lead to extensive damage to the limitations of their equipment. It If off-spec bunkers have been delivered vessels machinery which is costly for all is important that the quantity of and are found to be unsuitable for use, involved. the sample is large enough for the the bunkers should be off-loaded and appropriate analysis to be undertaken. replaced by new on-spec bunkers. If inferior bunkers have to be used or • Always be selective when selecting have already been used the following fuel supplier. Order fuel to the desired should be done: ISO grade, and describe the required grade in the charterparty as well as in • The vessel should immediately the request to the supplier. notify the shipowner if it is experiencing problems with off-spec fuel. If the • Take samples at the time of shipowner purchased the fuel directly delivery and obtain confirmation from from the supplier, he should notify the the suppliers that the samples are bunker supplier and forward a copy of representative of the entire delivery. the test result. The time limit for any The samples taken must be properly protest vis-à-vis the supplier is very short, at times only 2 weeks.

Introduction crude oil has been processed is likely fuel spilled from non-tankers. In the last Everybody who owns or drives a car to lead to bunkers of a lower quality two years, this percentage has risen to has experience of bunkering. We all fill being produced. If the bunkers contain about 50 per cent.” up with petrol from time to time. We additives such as used car oil, this may do so almost without thinking about well add to the problem. Causes of spills from tankers, it. Fortunately, we rarely, if ever, have combination carriers and barges during a problem with the quality of the fuel. Off-specification bunkers (bad bunkers) 1974-2000 (Source: ITOPF). And if we spill some petrol, it is not a can cause many problems. At best, “pollution incident”. they may result in the main engine not The above figures, produced by ITOPF in performing effectively or efficiently. their latest Handbook, show the causes The procedures which take place during This may result in reduced speed and of spills from tankers, combination bunkering vessels are, or should be, over-consumption of bunkers. In turn, carriers and barges, but not bulk carriers, very different from the procedure of either or both of these is likely to lead during the period 1974-2000. It can putting petrol into your car. Given the to a claim by charterers - a speed and be seen that 35 per cent of such spills problems and liabilities which bunkers consumption claim. occurred during the routine operation and bunkering can lead to, it is essential of loading or discharging. A further 15 that the entire bunkering operation, More importantly, the consumption per cent fall into the “other” category, from start to finish, is closely monitored of bunkers which are off-specification not involving serious casualties. These by the receiving vessel. It is also vital could well cause damage to the main “other” spills are almost certainly that the quality of the (new) bunkers engine. Relatively speaking, the age operational as well. Bunkering by itself is checked and the bunkers are tested and condition of the engine is not accounts for seven per cent. before they are used or mixed with relevant, although it is perhaps true other bunkers already on board. to say that an engine in first-class It is likely that for bulk carriers, the condition may have a greater tolerance number/percentage of oil spills Apart from nuclear-powered ships, all for bad bunkers than an engine in poor caused by casualties of some sort (i.e., vessels have to take on bunkers from condition. Nevertheless, damage to the grounding or collision) is substantially time to time. Large bulk carriers and main engine caused by bad bunkers is less than for tankers (which is only 14 container vessels can carry as much as likely to be a serious problem. Your hull per cent anyway) and the number/ 10,000 MT of fuel oil at any one time. insurers are likely to be worried. percentage of spills happening during Even the “workhorses” of the bulk routine operations is substantially higher. trades, the Handymax and Panamax Such main engine damage can lead to vessels, may have up to 1,000 MT of even more serious problems. If a loss Most bunker spills will be in the range fuel oil on board after bunkering. Fuel of main engine power occurs at sea, of between 7 and 700 MT. Some will oil is very viscous and persistent. there is likely to be a significant delay involve smaller quantities. Unless the to the vessel while the engineers work vessel concerned is a large vessel, with The problems which (good or bad) hard to put right the problem. They a large quantity of bunkers on board, bunkers can cause may not be able to do so. Salvage and is involved in a major casualty, such Bunkers do not need to be “bad”, or, assistance, or possibly a straightforward as a grounding in which more than one more correctly, off-specification, to tow, may be needed. Even more bunker tank is holed, few bunker spills cause serious claims and liabilities. A seriously, a vessel with little or no main will be more than 700 MT. spill of bunkers from any vessel is likely engine power could, particularly in to lead to a difficult and expensive confined waters, result in the vessel Many such spills are the result of clean-up operation and - depending grounding or colliding with another carelessness or negligence, either on to some extent on where the spill has vessel or fixed or floating object such the part of those supplying the bunkers, occurred - to claims for damage to the as a jetty or dolphin. If this happens, or those on board the vessel receiving environment and for losses suffered by both your hull and your P&I insurers will them. Even a technical problem, such individuals or organisations allegedly be very worried people. The potential as the failure of an alarm to go off, may affected by the spill. claims and liabilities arising in such well be the result of human error. More circumstances are very large. often, our experience is that one or more of the following are present: A spill of bunkers may lead to costly Bunker spills - failure to agree a loading rate with the claims. Bunker experts generally The International Tanker Owners’ bunker barge or shore loading facility; consider that overall bunker quality has Pollution Federation (ITOPF) publishes - failure on the part of the bunker barge deteriorated over the years, although oil pollution statistics every year. In or shore facility to stick to the agreed the quality also tends to follow the price a speech made at an oil pollution loading rate; and vice-versa. However, it is often conference in London in May 2001, - failure on the part of the vessel’s crew the case that, because of increased the managing director of ITOPF said to check that the bunkers are being demand for high quality products that “about 28 per cent of the oil spills loaded at the agreed rate and if they such as kerosene and jet fuel, the attended on site by ITOPF staff over the are not, failure to request the loading “raw material” left behind after the past fifteen years have involved bunker barge to slow down;

© Gard AS, January 2014 13 - failure to monitor the tank(s) into Disposal of the oil which has been trend is continuing. Remember that which the bunkers are being loaded; collected is also a problem and can criminal prosecution and any liability - failure to respond to an alarm be just as difficult and expensive as arising as a result is not covered by indicating that the tank is nearly full. the clean-up operation. If the spill P&I insurance. The legal costs involved has occurred in or close to an area and any liability incurred may well Out of all of these, Gard’s experience where other ships or private boats remain with the person or company in is that most bunker spills result from are moored, their hulls may be oiled question. an overflow of bunkers. The cause and require cleaning. Even more is usually one or both of the last two importantly, if the spill affects, or is All these problems can and often do failures. A former deck officer once alleged to have affected, mariculture, arise in a bunker spill. suggested that the best way of avoiding often fish-farming, the claims can bunker spills would to be connect all be very significant. The local and Even if there is no initial bunker spill, the bunker tank airvents and overflow sometimes the national, media may well it is very likely that, if the vessel has pipes to the chief engineer’s cabin! take an interest in the incident. Even suffered a casualty of some kind, the worse, local or national politicians may first “request” (i.e., instruction) from Example either take an interest themselves, or the authorities will be: “remove the A small tanker was discharging mineral find themselves called upon to do so by bunkers”. The nature of the casualty oil at a berth upriver in London. their voters, whose pleasure boats have and the quantity and location of the Owners’ safety officer was on board to been oiled, or whose beach has been bunkers are often ignored. The focus - assist with a vetting inspection by one closed while the clean-up is carried out. sometimes to the exclusion of almost of the major oil companies. During everything else - is on the potential discharge from four of the vessel’s Even a small quantity of fuel oil can, pollution which the bunkers could cause. tanks, the high level alarms went off. if spilt, result in very large liabilities. The master and chief officer were Perhaps the best - or worst - example This may be good for the environment. It taking part in the vetting inspection concerns a non-tanker - a woodchip is certainly good business for the salvors. and the second officer was on duty. carrier, which spilled approximately However, someone has to pay for it and He assumed that the alarms had been 17.5 MT of heavy fuel oil in a port in it is likely that a shipowner will look for activated in the course of the vetting Southern California. The spill occurred his P&I Club to do so, on the basis that inspection - perhaps to show to the during loading and was caused by the the removal of the bunkers is mainly a inspectors from the oil company that vessel making contact with a dolphin on measure to avoid or minimise pollution. they worked properly - and took no the jetty. A bunker tank was holed and action. In fact, they had been activated heavy fuel oil was spilt. For the first five Over the last 20 years or so, there in exactly the intended way - to warn days, the clean-up cost, per day, was has been worldwide growth of that cargo was close to overflowing approximately USD 1 million. After five environmental awareness and concern from a cargo tank. A couple of minutes days, it was possible to reduce the cost about the damage which we are all, later, the cargo overflowed from one per day to about USD 500,000. By the in some way, said to be doing to the of the tanks. Fortunately, the crew then end of 1999, the Club in question had environment. These days, the publicity responded very quickly and took all paid approximately USD 14.3 million, given by the media to an oil spill of any the required steps to stop discharge mainly in respect of clean-up costs and significance is extensive and almost and clean up the spill. As a result, only third party claims. They were estimating always unfavourable to the shipowner, a very small quantity - estimated at a further USD 10.7 million to cover or indeed, almost anyone involved in 100 litres - went over the side. Later the claim for alleged natural resource the operation of the ship. Remember investigation showed that the device damage and further legal and expert’s the very negative publicity which Total, showing the position of the cargo costs. A round sum of USD 25 million! the charterers of the ERIKA, received. valves (i.e., open or closed) was not working on almost all valves. Both the This is the worst-case scenario - the P&I Bunker spills are difficult and expensive chief officer and the second officer man’s nightmare. Most bunker spills to deal with. International conventions wrongly thought that a particular valve do not cost anything like this amount, With the exception of the US, a large was closed, when in fact it was open. but they are difficult and expensive proportion of the world’s coastal Neither of them checked the position to deal with. If you spill a little petrol states have ratified one or both of the of the valve before starting discharge. when you are filling up your car, it is Civil Liability Conventions (CLCs) and The quantity spilled was very small. It nobody’s problem but yours, since you the International Convention on the was not spilled into the water, but on to have to pay for the petrol you have lost. Establishment of an International Fund “Thames mud”, which becomes visible You do not have to clean it up. Nor for Compensation for Oil Pollution at times as a result of the large rise and do you have to pay compensation to Damage (Fund Convention). These fall of the river. Despite this, the Port the garage owner for “damaging” his conventions essentially deal with of London Authority (PLA) investigated property. Nor do you have to deal with compensation for loss and damage the incident, with a view to possible claims from third parties - for example, caused by oil pollution from tankers and criminal prosecution. Ultimately, they people living near to the garage who are widely recognised and accepted. decided not to prosecute. Instead, may claim that they have been affected they issued the master with a letter by the smell of the petrol which has The text of a new convention, of warning, which will be taken into been spilt. Nor are you likely to face specifically covering bunker spills, account in a future similar incident. The civil and criminal proceedings, with was agreed in March 2001 at an IMO potential maximum fine in such cases is every chance of being deemed to be Diplomatic Conference in London. It is GBP 250,000 in the Magistrates Court guilty, which brings with it the potential unlikely to come into force for at least or an unlimited fine in the Crown Court. for large fines and even imprisonment. a couple of years, but the intention In the example mentioned, criminal is for this latest Convention to fill the The time and cost involved in cleaning- prosecution did not happen. However, gaps left by the earlier CLCs, which up spills of heavy fuel oil is usually Gard has had many cases, in various effectively date back to 1969 and 1992.1 considerable. The oil is thick and does countries, where the master, usually not evaporate or disperse. Manual together with the shipowner, is Neither the CLC 1969, nor the Protocols cleaning is often the only option. criminally prosecuted. Regrettably, this to the CLC of 1992, will apply to a spill

© Gard AS, January 2014 14 of bunkers from a non-tanker, such as a on the Club is USD 250,000. In addition, does not mean that serious problems bulk carrier. However, in general terms, some areas of the vessel were heavily will automatically follow. The vessel’s if the bunker barge supplying the oil oiled and had to be cleaned. The time engine may be capable of using the could be classed as a “tanker” and the and expense involved in cleaning the fuel, albeit with a reduced power spill occurred from the bunker barge, vessel is unlikely to be covered by the output and/or a greater consumption the CLC in one of its two forms would P&I insurance. It is owners’ responsibility of fuel to produce the same power. probably apply. to properly clean and prepare the vessel Such circumstances are, however, likely for loading and carrying cargo. to lead to a claim by charterers either The fact that many countries are now because the vessel has burned a larger focusing more closely on bunker spills Bunker shortages quantity of bunkers than she should can be seen from the new compulsory Engineers reading this article will know have, or because she has taken longer insurance requirements which have the difficulties involved in accurately to complete the voyage (because of come into force in Australia. measuring and perhaps more importantly, the reduced power output). Often, agreeing with the bunker supplier, the the claim is a combination of the two As from 6th April 2001, all ships quantity of bunkers supplied. Inevitably, aspects - what is called a speed and larger than 400 GT which are visiting with a bulk liquid, there will be some consumption claim. an Australian port and are carrying minor measurement variations. Equally, oil as cargo or bunkers must have a however, there are examples where the Claims for delay “relevant insurance certificate”. This difference between the bunker supplier’s A speed and consumption claim by rule does not cover oil tankers which figures and the vessel’s figures are itself is not necessarily particularly are already required to have such substantial. It always seems to be the difficult or expensive, but a long delay insurance under the 1992 CLC. Clearly, case that the supplier’s figures are higher in the voyage will mean a delay in the therefore, the rule is aimed at non- than the vessel’s figures. delivery of the cargo. Often, this may tankers and by implication, at bunker not matter. Sometimes, however, it pollution. Amongst other things, the In a case mentioned in a recent warning may be extremely important to both “relevant insurance certificate” must issued by DNV and Intertanko, a vessel the seller and the buyer, especially if state the amount of insurance cover, bunkered diesel and fuel oil. The the price of the cargo has gone up or other financial security, which “must responsible engineer on board the or down during the period of delay. be no less than the limit of any liability vessel recorded substantial shortages In such circumstances, the party who applicable under relevant international for both products. In the case of the may have lost money because of the law”. The good news is that, in most diesel, the bunker barge’s figure was delay may well bring a claim against the cases, the requirements should be met 119.69 cbm , whereas the vessel’s figure vessel. Depending on the cargo and by carrying on board the original P&I was 93.0 cbm, a shortage of 26.69 the variation(s) in price, the amount may Club certificate of entry, or a certified cbm. At the request of the vessel, the be large. Further, the cargo itself may copy. The certificate must be produced bunker barge resumed pumping diesel. have suffered damage. Many fruit and on request. Problems were also noted in relation vegetable cargoes have a limited shelf to the fuel oil. The flow from the barge life and the conditions under which they Other problems with “good” bunkers to the vessel was very slow. When the are carried are calculated as precisely As can be seen from the above, engineer commented on this, the crew as they can be for the expected length bunkers do not have to be “bad” to of the bunker barge were seen to adjust of the voyage. A delay of only a few cause serious problems. Apart from the a valve on board the barge, which days can upset these calculations. The pollution aspect, even on-specification resulted in the flow speeding up. Even result can often be a claim for damage bunkers can cause problems and so, on completion of bunkering, the to the cargo, often the entire cargo if damage, as can be seen from the vessel still recorded shortages of some the vessel is carrying foodstuffs with a example described below. 3 MT in relation to the fuel oil and some limited shelf life. 19 MT in relation to the diesel. A purpose-built car carrier, laden with Conclusion cargo for Japan and entered with Gard, “Bad” bunkers Being human, all of us will make was bunkering heavy fuel oil in the Far We have seen how perfectly good mistakes from time to time. Fortunately, East just before Christmas 2000. The (i.e., within specification) bunkers can these mistakes rarely have important vessel was receiving bunkers into the cause serious problems and liabilities. consequences, but from time to time, No. 1 port and starboard bunker tanks. Bad bunkers - bunkers which are off- a person involved in the bunkering Because an inlet valve had been left specification - can cause equally difficult operation, or in the preparation and use open, bunkers leaked into the No. 4 and expensive problems and liabilities. of the bunkers on board the vessel, will centre heavy fuel oil tank. This tank was make a mistake which results in a spill nearly full. Not surprisingly, it filled up Gard News issue No. 156 contains an of bunkers, or in damage to the main and the excess oil overflowed up the article dealing with procedures for engine or other machinery on board. ventilation pipe. Unfortunately, this pipe bunkering.2 It includes comments and had a small hole, later found to have suggestions in relation to sampling and Clearly, it is impossible to do away with been caused by corrosion, through which testing the bunkers received, as well as human error completely. One must fuel oil leaked out. Where did it go? practical advice, especially regarding accept that accidents will happen from Approximately 3 MT leaked out on to a the sampling and testing of bunkers time to time - that is what P&I insurance car deck in No. 2 hold. Some of this ran before use. A little prevention at an is for. However, by properly following down through lashing openings on to early stage can avoid the need for a lot well prepared and clearly explained a further three car decks. As if this was of (expensive) cure at a later date! procedures, the problems and incidents not bad enough, a further, fortunately Speed and consumption claims mentioned above can be avoided. small, quantity of fuel oil leaked from a Unfortunately for shipowners and previously repaired part of the ventilation charterers and their insurers, proper Footnotes pipe from No. 4 centre F.O. tank. The sampling and testing is not always 1 See article “The new Bunker cargo was BMW cars! Some 41 cars carried out. As a result, fuel which Convention” elsewhere in this edition were badly damaged. A further 209 were is off-specification in some way may of Gard News. slightly damaged. The estimated liability well be supplied to the vessel. This 2 “Liquid Gold - Fuel oil and lubricating oil”, pages 30-32.

EU Directive (1999/32/EC), covering sufficient time must be allowed for the 4b(2)). The Directive was amended the sulphur content of marine fuels, crew to complete any fuel changeover again in 2012 (2012/33/EC), bringing EC was amended in 2005 (2005/33/EC). operation as soon as possible after legislation in line with MARPOL Annex As of 1 January 2010, ships berthed arrival at berth and as late as possible VI on the requirement for the use of in a European Union (EU) port must before departure. Ships that, according low sulphur fuels, and the current EU use marine fuel with a sulphur content to published timetables, are due to requirements can be summarised as not exceeding 0.1% by mass (Article be at berth for less than two hours are follows: 4b(1)). The Directive also states that exempted from the requirement (Article

Type of ship: Max fuel sulphur content Max fuel sulphur content outside SOx ECAs1 inside SOx ECAs a) All ships excluding b) and c) below 3.5% from 18 June 2014 1.0% until 31 Dec 2014 0.5% from 1 Jan 2020 0.1% from 1 Jan 2015 b) Passenger ships on regular services2 1.5% until 1 Jan 2020 Same as above to/from EC ports excluding c) below 0.5% from 1 Jan 2020 c) Ships at berth in EC ports 0.1% 0.1%

From time to time Members and clients 0.4% - and no fuel samples had been that the time may vary depending upon contact Gard to ask for advice when a analysed upon delivery to establish if ship type and ship systems (ref. MCA’s ship has been fined for burning non- the fuel’s actual sulphur content was MGN 400 (M+F)). compliant fuel in an EU port. Gard has exceeding 0.1% or not. • Authorities are likely to expect a ship recently been notified of three different to have compliant fuel onboard on cases where ships have been fined for After more than three years in arrival at the berth and will not accept alleged breaches of a state’s national operation, shipowners and operators additional delays in the changeover legislation concerning sulphur content calling at EU ports should be fully operation caused by time spent of marine fuels used in ports.3 conversant with the applicable procuring and taking delivery of regulations. However, given that there compliant fuel after berthing. Case A: A ship at an outer anchorage, may be differences in enforcement, Useful clarifications are also provided waiting for a load berth, did not even within member states, recent in the EU document: “Questions and perform a fuel changeover operation. cases indicate that Members and Answers on the use of fuel containing However, the authorities still considered clients should continue their focus on not more than 0.1% sulphur in ships the ship’s position to fall under the providing crew with proper instructions while at berth”. regulatory definition of ‘at berth’4 on the purchase and use of low sulphur because it was securely anchored inside fuels. The following should be noted: Footnotes the port limits and providing crew 1 The current EU SOx ECAs are the with accommodation and associated • The requirements for fuel changeover Baltic Sea and the North Sea, including services (hotelling). contained in the EU Directive apply the English Channel. from the moment the ship is securely 2 Regular services means: “a series Case B: A ship arrived in port without moored or has anchored in port, of passenger ship crossings operated having compliant fuel available on but since the Directive does not so as to serve traffic between the board. Although low sulphur fuel contain a common definition of ‘port’, same two or more ports, or a series had been ordered well in advance the delimitations of each port are of voyages from and to the same port and was to be delivered immediately established locally. Ships intending without intermediate calls, either: (i) upon arrival in the port, bad weather to burn high sulphur fuel at outer according to a published timetable, or prevented the bunker barge operations anchorages within EU ports should (ii) with crossings so regular or frequent and the ship was not able to complete therefore, for each individual port call, that they constitute a recognisable its fuel changeover operation within seek the advice of their agent as to schedule”. what was considered a “reasonable whether or not a specific anchorage 3 It is important to remember that each time” by the authorities. falls within ‘the port’ for the purposes of EU member state has implemented sulphur emission compliance. the EU Directive through their national Case C: A ship completed its fuel • Guidance on the term ‘sufficient legislation. changeover operation immediately after time’ for the crew to complete fuel 4 Ships at berth means: “ships which berthing, but upon inspection by the changeover operations may vary within are securely moored or anchored in a local authorities, it was discovered that member states, e.g. UK authorities Community port while they are loading, the delivery note for the low-sulphur fuel will in general consider one hour to unloading or hotelling, including the being consumed in port only indicated be sufficient time to complete fuel time spent when not engaged in cargo that its’ sulphur content was less than changeover operations but recognising operations”.

Phase II of the California Ocean- requirements. The ECA sulphur limit will going Vessel (OGV) Fuel Regulation drop to 0.1% from the start of 2015. entered into force on 1 January 2014 and stipulates that only marine gas In addition, Members and clients oil (DMA) and marine diesel oil (DMB) should be aware that there are also with sulphur levels at or below 0.1% 2014 requirements for some vessels can be used. The Phase II requirements under California’s At-Berth Regulation. are enforced within California’s OGV More information on this regulation Regulatory Zone which extends 24 can be found by using the following nm from the California Baseline link: http://www.arb.ca.gov/ports/ (shoreline), including 24 nm from the shorepower/shorepower.htm shoreline of the offshore islands.1 Although the regulation does provide Gard would also like to take the a ‘Noncompliance Fee Provision’ opportunity to remind Members and designed to accommodate operators Clients of the importance of having unable to find compliant fuel, Members detailed changeover procedures for and clients with ships calling at U.S. ships that trade between areas with 2 West Coast ports are urged to make different sulphur limitations. The need Footnotes their best efforts to obtain compliant for frequent changeovers between 1 See also Gard Alert from October fuel oil. More details are provided in different types of fuels clearly increases 2011 concerning amendments to the California Air Resources Board’s Marine the opportunity for errors to occur California Fuel Regulations. Notice 2013-1 which can be obtained and it is very important that the crew 2 It is a MARPOL Anne VI requirement by using the following link: is familiar with the properties of the to have a written procedure on board http://www.arb.ca.gov/ports/ fuel supplied and the limitations of the the ship showing how the fuel oil marinevess/ogv.htm. particular ship’s fuel treatment plant. change-over is to be done when Insufficient knowledge of the actions entering or leaving an Emission Control It should be noted that ships must required in a given situation may Area (ECA). comply with both the California OGV result in engine failure, so changeover Fuel Regulation and the MARPOL procedures should be practised before Annex VI North American Emission entering restricted waters, especially on Control Area (ECA) fuel sulphur ships that do not regularly perform fuel changeovers.

North American Emissions Control 1.0% sulphur standard to be available the fuel changeover logbook. Other Area (ECA) requirements for vessels that plan to operate in methods of verification of compliance The North American ECA will enter into the North American ECA - but also may also be enforced and could include force on 1 August 2012 and includes anticipates that, despite the best sampling and analysing fuel oil from areas around the Hawaiian Islands but efforts2 of the shipowner or operator, the vessel’s fuel oil tanks and lines and does not include the US Caribbean they may in some instances be unable air emissions from the vessel’s exhaust Sea ECA, which will enter into force to ensure compliance. The EPA has plume. on 1 January 2014. The geographical therefore released interim guidance for shipowners and operators to: limits of the North American ECA can If, in spite of best efforts, it is not be found in Appendix VII of MARPOL possible to procure compliant fuel oil Annex VI and in IMO Circular MEPC.1/ 1 1) provide background information on prior to entering the North American Circ.723. the North American Emission ECA fuel ECA, the United States government sulphur standards; and the Flag Administration must be The sulphur content of fuel oil used 2) explain in what way compliance with notified. In order to minimise disruption on board vessels operating within these requirements can be established to trade and avoid delays, a “Fuel the North American ECA must not as well as how to demonstrate Oil Non-Availability Report” should exceed 1.0% by weight on or after compliance if requested to do so by the be submitted as soon as possible 1 August 2012. As an alternative to United States government; and and no later than 96 hours prior to using low sulphur fuel oil, shipowners 3) describe how to make a fuel oil non- entering the North American ECA. The and operators may choose to equip availability claim should the vessel not interim guidance contains a list of the their vessels with exhaust gas cleaning be able to obtain compliant fuel. information that should be included in devices (scrubbers) in accordance with a Fuel Oil Non-Availability Report and MARPOL Annex VI Regulation 4 and Click here to access the full text of also provides details of where to send the corresponding emission value for a the EPA statement and the interim the report. fuel oil sulphur content of 1% is a ratio guidance. of 43.3 SO (ppm)/CO . 2 2 Footnotes Recommendations 1 See also Gard Alert “North American Further information can also be found Members and clients are strongly ECA MARPOL amendments entered in the US Environmental Protection advised to plan in advance so that into force 1 August“ issued on 18 Agency’s (EPA) fact sheet: Designation vessels entering or operating in the October 2011. of North American Emission Control defined North American ECA have fuel 2 “Best efforts” to procure compliant Area to Reduce Emissions from Ships. on board with a sulphur content of a fuel oil, include, but are not limited to, For vessels visiting Californian ports maximum of 1.0% and that they start investigating alternative sources of fuel special requirements apply within 24 using it as of 1 August 2012. oil prior to commencing the voyage nautical miles (nm) of the California or en route prior to entering the North American ECA. However, a deviation Baseline (shoreline). Reference is Once the North American ECA from the intended voyage in order made to Gard Alert “Amendments requirements enter into force, it will to purchase compliant fuel oil is not to California Clean Fuel Regulations“ be essential that accurate records required and the EPA does not expect issued on 1 December 2011 for details. are maintained on board in order to vessels to use distillate fuel oil, other be able to demonstrate compliance than as a blending agent, prior to 1 Interim guidance on the non- with the new requirements at any January 2015 when the 0.1% sulphur availability of compliant fuel oil time during routine Port State Control standard begins for the North American ECA inspections. Typical documents to be The US Environmental Protection presented are bunker delivery notes, Agency (EPA) indicate that they do representative fuel oil samples, written expect fuel oil compliant with the fuel oil changeover procedures and

The North American Emission Control 2014, in the case of a foreign vessel or a entries made when the vessel enters Area (ECA) requirements, as defined foreign pleasure craft that is operating and exits the ECA, with date, time and under MARPOL Annex VI Regulations in waters under Canadian jurisdiction position noted. for prevention of air pollution from other than arctic waters or in Hudson ships, are now in force in Canadian Bay, James Bay or Ungava Bay.” Please refer to Transport Canada’s territorial waters. webpage: This brings Canadian enforcement of http://www.tc.gc.ca/eng/mediaroom/ The North American ECA was the North American ECA requirements backgrounders-vessel-pollution- originally due to enter into force on 1 in line with current enforcement by regulations-7162.html for a description August 2012, but Transport Canada’s US authorities, and effectively make of all amendments to the pollution amendments to their Vessel Pollution compliance mandatory in all areas of regulations. and Dangerous Chemicals Regulations the ECA.2 Members and clients are were delayed due to additional advised that: Footnotes consultations with the domestic marine • Enforcement of the North American 1 See previous Gard Alert from 20 July industry.1 However, on 8 May 2013, ECA requirements in Canadian waters 2012: Canada delays implementation of the amendments to the regulations is immediate, with effect from 8 May the North American ECA requirements. were published in Part II of the Canada 2013. All vessels entering the Canadian 2 The North American Emission Control Gazette. part of the North American ECA must Area (ECA) covers waters within the now use only fuel oil with a maximum jurisdiction of the US, including Hawaii Under the category “Sulphur Oxides sulphur content of 1.0% by mass, until 1 and Alaska south of 60°N. It also covers (SOx)”, the amended regulations state January 2015.3 Canadian territorial waters south of that “the authorized representative of • It is essential that accurate records 60°N and extending approximately a vessel must ensure that the sulphur are maintained on board in order to 200 nautical miles out to sea, as well content of the fuel oil used on board be able to demonstrate compliance as French territorial waters around the the vessel does not exceed: with the new requirements at any islands of St. Pierre and Miquelon. (g) 1.00% by mass before January 1, time during routine Port State Control The geographical limits of the North 2015, in the case of a Canadian vessel inspections. Documents which may be American ECA can be found in or a Canadian pleasure craft that is requested are bunker delivery notes, Appendix VII of MARPOL Annex VI and operating in waters under Canadian representative fuel oil samples, written in IMO Circular MEPC.1/Circ.723. jurisdiction other than arctic waters; fuel oil changeover procedures and the 3 As an alternative to using low (i) 1.00% by mass before January 1, fuel changeover logbook. sulphur fuel oil, shipowners and 2015, in the case of a foreign vessel or a • Every effort must be made operators may choose to equip their foreign pleasure craft that is operating to acquire compliant fuel before vessels with exhaust gas cleaning in waters under Canadian jurisdiction commencing a voyage to Canada, as devices (scrubbers) in accordance with other than arctic waters or in Hudson well as at ports en route to Canada. MARPOL Annex VI Regulation 4 and Bay, James Bay or Ungava Bay; However, if a vessel is unable to the corresponding emission values for (j) 0.10% by mass after December 31, acquire compliant fuel oil, copies a fuel oil sulphur content of 1.0% is a 2014, in the case of a Canadian vessel of all correspondence between the ratio of 43.3 SO2(ppm)/CO2. Any such or a Canadian pleasure craft that is involved parties must be kept, including equivalent methods must be approved operating in waters under Canadian correspondence between the vessel’s by the vessel’s Flag Administration. jurisdiction other than arctic waters; operators, agents, bunker suppliers, (l) 0.10% by mass after December 31, bunker brokers and charterers and log

Gard News 199 Hull and machinery incident August/October 2010 - Consequences of using off- specification bunkers

Another example of the importance of reach the next port whilst maintaining sampling and testing bunkers. reduced speed. They also had to stop several times each day to replace fuel Bunkering valves, fuel pumps and to clean filters A medium-sized bulk carrier was and change exhaust valves dealing with delivered HFO (heavy fuel oil) bunkers turbocharger problems. The service whilst at anchorage at a port in and settling tanks were being drained the Far East. Since the vessel was almost continuously. scheduled to sail to Europe, and due to the prevailing fuel prices, charterers Repairs decided to bunker the vessel to almost The vessel finally arrived at the next full capacity. The operation itself took port of call several days late. The owner several hours and was completed decided to pump the off-specification View of damaged cylinder liner. without problems. However, the vessel bunker ashore and ordered new did not take its own fuel samples during bunkers. During the vessel’s stay in the bunkering, but instead received port, various repairs were carried out two sealed samples from the barge to the main engine. All pistons were operator. Both samples were signed by dismantled and overhauled and piston the vessel’s chief engineer; however, rings were replaced. Several of the neither of the samples was sent ashore piston top rings were broken whilst one for further analysis. was badly worn. One of the cylinder liners was cracked and had to be The fuel delivered was specified replaced. The main engine fuel system as 380cst -RMG 35, which was in and turbocharger had to be completely accordance with the applicable overhauled and the settling and service charterparty. tanks had to be emptied and cleaned.

Problems Several fuel samples were taken during View of damaged cylinder liner with Soon after leaving port, the engineers the vessel’s stay in port and sent ashore piston fitted. started using the new bunkers. for testing, which revealed that the Shortly thereafter, they experienced fuel was off- specification. The whole abnormal sludge generation in the operation became very costly, time- purifier, which resulted in excessive consuming and caused delays to all water-sludge content in the settling involved. and service tanks. A large amount of water and sludge was drained from Lesson learned these tanks. The amount of water and It is strongly recommended that: sludge also resulted in problems with - the crew ensure there is sufficient the performance of the main engine, quantity of tested reserve HFO on in the form of fluctuations in exhaust board for consumption to cover the temperatures, as well as a rise in the time delay involved in sending newly- scavenge temperatures of the various bunkered representative samples for units. The main engine fuel pumps testing and receiving the laboratory test and fuel injection valves also sustained results. some damage. - the crew take sufficient representative samples of bunkers received and send In order to prevent any power failure, them ashore for testing. the fuel consumption of the auxiliary - laboratory test results for newly engines was switched to diesel oil. received bunkers are known before The engine crew switched the fuel consuming the bunkers. consumption to another double bottom Piston complete. tank, containing the newly bunkered HFO, but with the same result. Consequently, the engine crew had to consume the recently bunkered HFO for the propulsion machinery as nothing else was available and as a result the vessel had to reduce speed and slow steam to the next port, which was 12 days away. It took several days to

Gard News 195, August/October 2009 The importance of an efficient fuel oil treatment system

Fuel-related engine breakdown is operational problems may occur if chamber (piston grooves, piston rings, not a novel problem, and even as the HFO separators are not properly cylinder liners) and of the fuel injection more stringent rules, regulations and operated and maintained. equipment (fuel pump plunger and procedures are implemented, Gard barrel, fuel injection valves), will be the regularly sees engine casualties where HFO contains catalytic fines such as consequences of exceeding the level of the cause can be traced to poor fuel aluminium and silicon oxides, which catalytic fines of 15 mg/kg. quality or poor on-board fuel treatment. are remnants from the refining process. This article will focus on the latter. These are hard abrasive particles, and In order for the HFO separators to ISO 8217:2005 regulates the amount efficiently reduce the level of catalytic The current international standard of catalytic fines permitted in HFO, fines and other impurities that can be for heavy fuel oil (HFO) to be used in expressed as Al+Si, to 80 mg/kg present in the fuel oil, such as rust, marine diesel engines and boilers is (ppm). However, due to the abrasive sand, dust and water, the following ISO 8217:2005. It defines limit values nature of these particles, most engine precautions should be taken: for a large number of substances manufacturers limit the amount of – Keep the HFO inlet temperature at and impurities which the HFO can catalytic fines in the fuel injected into 98oC. The efficiency of the separators contain. However, even if the HFO the engines to 15 mg/kg. Excessive is highly dependent on the inlet received satisfies these requirements, wear of components in the combustion temperature of the fuel, and even a

Picture 1 – Example of a fuel system analysis.

Bunker Port or Sample Fuel System Dens H20 S V Na Al Si Fe TSP Sample Date ddm- Position kg/m3 % v/v % mg/ mg/ mg/ mg/ mg/ % Number myy @15c m/m kg kg kg kg kg m/m F307003850 260209 ULSAN 977.4 <0.10 3.06 54 6 6 7 6 <0.01 F307004249 180309 SINGAPORE 987.0 0.30 2.93 217 31 15 17 12 0.03 F307005251 170309 SINGAPORE 989.8 0.16 3.38 190 17 14 15 10 0.03 F407006350 200409 ANTWERP 984.2 <0.10 2.04 90 15 2 4 12 <0.01 F407006372 260409 ROTTERDAM 989.7 0.11 1.31 66 11 30 25 13 0.03

Bunker tank in use: Port Fwd 11 F. Centrifuge operation: Parallel.

The fuel in use is indicated as being the fuel bunkered in: ROTTERDAM on 26th April 2009.

The sample taken at the transfer pump indicates low levels of sludge and water and somewhat high levels of impurities. Compared with the bunkering sample some settling of impurities appears to have taken place in bunker tank(s).

Water and sediments remain at low levels throughout the fuel system.

Sample after Separator 1: The somewhat high levels of solid contaminants have been reduced to acceptable levels for diesel engine use.

Sample after Separator 2: The levels of solid contaminants have been reduced but still on the high side for consumption, hence some marginal increase of wear in cylinder gear and injection equipment may be expected.

NB. Please ensure that fuel treatment is operated at optimum condition with centrifuges in parallel using the lowest possible throughput while keeping the fuel temp. near to 98°C.

NB. As always when ‘Cat-fines’ and water are detected – Frequent bottom draining of all tanks and filters in use is advisable.

© Gard AS, January 2014 21 – Maintenance. Maintain the separators institute, and the result will provide according to maker’s instructions and an indication of the efficiency of the use maker’s approved parts only. In separators. The analysis will be most addition, it is recommended to have the accurate if performed once the analysis separators checked by maker’s service of the regular bunker manifold sample engineers at regular intervals. confirms that a certain amount of cat – Regularly clean storage, settling fines is present in the bunkered fuel and service tanks. Large particles oil. Above 25-30 mg/kg is preferable. will settle in the storage, settling The results of the analysis gives and service tanks, and over time the owners/managers regular verification concentration of abrasive particles of the quality of operation and the in the bottom of the tanks can be superintendent can, in co-operation excessive. During rough weather these with the chief engineer, discuss relevant components can be whirled up and actions if required. Picture 1, below, is supplied to the separators, sometimes an example of such an analysis. in concentrations above the limits set out in ISO 8217:2005. Hence, In this context it should also be these tanks should be drained and mentioned that companies such cleaned at regular intervals, typically as DNV Petroleum Services and during scheduled yard stays. This also Lloyd’s Register (FOBAS) offer fuel illustrates that it is beneficial to run all management services that can assist available separators, even when the fuel shipowners in efficiently running on- used initially has a low level of catalytic board fuel treatment systems. fines. By following the above An efficient fuel treatment system Further to the above recommendations, recommendations, the fuel treatment reduces the risk of casualties. it is also important that the quality system should operate with optimum of the on-board fuel treatment has efficiency, which will increase the a strong focus from owners’ and likelihood of the engines having an small reduction in temperature will managers’ side. Regular monitoring of acceptable level of wear, and reduce reduce the quality of separation. The the performance is vital to ensure that the risk of casualties creating costly recommended inlet temperature is the systems on board are capable of business interruption losses. 98oC, but this is often not achieved handling the HFO supplied at all times. due to limited steam supply to the Important issues in this context are: Read more about fuel oil in Gard News: pre-heaters, wrong set point, the pre- – Educate and train responsible – “Liquid gold – Fuel oil and lubricating heaters being too small, fouled or in personnel. Ensure that the junior oil” in issue No. 156. other ways defective. engineers responsible for the operation – “The quality of bunkers” in issue No. – Use correct flow ratio. The longer and maintenance of the separators are 163. the fuel is present in the separator, the properly trained and are familiar with – “Some technical aspects of marine better the cleaning of the fuel oil will the equipment and how to perform the fuels testing” in issue No. 165. be. Since the 1980s, separators without regular maintenance. This increases – “The interplay of fuel and lubricating gravity discs have been more or less reliability, and also reduces the oil quality on the reliability of diesel standard, and it is recommended consumption of non-wear parts. engines” in issue No. 174. to always use all available HFO – Check fuel system efficiency. To separators and to run them in parallel, verify that the fuel treatment system with corresponding feed rate. If the really works as it should, procedures separators are of the manual type with should be implemented where fuel gravity discs, they must be operated samples are taken before and after in series with a purifier followed by a each separator at intervals of four to clarifier, but with the lowest possible six months. The samples should be flow. sent to an established fuel analysis

Gard News 187, Marpol Annex VI - New August/October 2007 risks and challenges for owners and charterers

Gard News has a look at some of the Annex VI sets limits on sulphur oxide certificate (IAPP Certificate) issued by challenges of compliance and potential (SOx) and nitrogen oxide (NOx) the flag state (usually the class society consequences of non-compliance with emissions from ship exhaust and as designated agent by flag state or MARPOL Annex VI. prohibits deliberate emissions of ozone for ships that are not registered in a depleting substances. The Annex MARPOL Annex VI signatory state). What is MARPOL Annex VI? places a global cap on the sulphur MARPOL Annex VI is a section of content of fuel oil at 4.5 per cent In order for flag and port states the International Convention for the m/m (percentage by mass) and a 1.5 to monitor compliance with the Prevention of Pollution from Ships, per cent m/m cap in “SOx Emission regulations, MARPOL Annex VI 1973, as modified by the Protocol of Control Areas” (SECAs). The Baltic Sea requires a bunker delivery note to be 1978 relating thereto (MARPOL 73/78), is currently defined as a SECA. In July obtained and retained on board stating drafted by the International Maritime 2005 the IMO adopted amendments the sulphur content of the bunkers Organization (IMO).1 The individual which identify the North Sea as a supplied, as well as samples of the oil. sections of the convention have SECA, with an implementation date Fuel oil suppliers that are located in entered into force at different times of November 2007. Annex VI also MARPOL Annex VI signatory states are as they gained the required number prohibits the introduction into fuels of subject to the regulations but those of signatory states. For example, inorganic acids or chemical wastes that in non-signatory countries are not MARPOL Annex I, regulations for the could jeopardise the safety of the ship, subject to oversight by the port state prevention of pollution by oil, have or harm ships’ personnel.2 authorities. been in force for more than 20 years. Annex VI, regulations for the prevention Ships of 400 GT or more engaged The challenges of compliance and of air pollution from ships, entered in international voyages to or from potential consequences of non- into force on 19th May 2005. Presently countries that have ratified the compliance 37 countries have ratified Annex VI convention or ships flying the flag of An article written by a DNV expert covering 70 per cent of the global those countries are required to have an and published in Gard News issue No. tonnage. International Air Pollution Prevention 1843 outlines some of the possible

1 See article “Annex VI of MARPOL 73/78 – Regulations for the Prevention of Air Pollution from Ships” in Gard News issue No. 176. 2 See article “MARPOL Annex VI – Solving the low sulphur issue” in Gard News issue No. 184.

© Gard AS, January 2014 23 problems with low sulphur fuels and requirements as well as any special should there later be a question as to with the addition of the North Sea regional requirements where the vessel compliance. But testing should be done SECA. Among those issues identified may trade. The United States is not in any event to make sure the bunkers are ignition and combustion problems currently a signatory to Annex VI but supplied meet the specifications. due to the low sulphur content and an California, for example, has its own Sampling should be witnessed by vessel increased presence of catalytic fines, standards and requirements for ship personnel or a designated surveyor abrasives that can damage the engine. stack emissions. and samples should be taken at the Toxic materials may find their way ship manifold. It is not recommended into fuels. Such materials can lead to As an addition to fuel specification, to accept samples from the supplier personal injury of crew or others aboard BIMCO has published a clause that that have not been witnessed. Ideally, or on shore. DNV has also questioned is intended to balance the rights the sale contract should include an the market availability of sufficient low and responsibilities of owners and agreement to the test protocol and lab sulphur bunkers due to the addition charterers.4 Pursuant to this clause for the analysis. of the North Sea SECA. Finally, as an the charterer will be liable to the operational problem DNV has identified owner when the physical supplier has If the fuel is ultimately determined to be the difficulty of timing a change over delivered non-compliant bunkers. If off-spec, can the buyer seek recourse to fuel required to enter and operate the bunkers supplied are compliant, against the seller for additional costs or within a SECA. Even with the required the owner will be responsible for the liabilities they may have? Yes, but often fuel on board, a mistimed or improperly consequences of operational failures the sale contract contains provisions executed change over will result in such as failure to timely change over that either extinguish the claim or limit violations within a SECA. to low sulphur fuel before entering a it. Bunker supply contracts are notorious SECA which results in sulphur content in for extremely short claim notification In the event that the fuel does not excess of 1.5 m/m. limits. Seven days from delivery is meet the low sulphur requirements, common. The short window for claims port state or flag state authorities may The bunkers sale contract and against the supplier underscores the require deviation, de-bunkering and possible recourse against the importance of immediate analysis replacement of fuel, causing delay and bunkers supplier and notice to the supplier. Another additional costs. MARPOL violations The business of supplying bunkers common clause limits the claim to the may also result in fines against the is said to be one of slim margins. Yet value of the bunkers supplied which will vessel. Reportedly, enforcement activity the commodity is essential. Suppliers be insufficient to cover losses such as has, to date, been light but if history generally have the upper hand with damage to an engine. with respect to MARPOL Annex I serves respect to dictating the terms of the as an example, penalties will increase if sales contract. Suppliers in MARPOL The bunker sale contract should contain the industry is slow to comply. signatory countries do have an a dispute resolution clause which also obligation to comply with the Annex VI specifies law and jurisdiction. In an ideal The vessel owners’ and charterers’ requirements and should not have an world, the forum would be the same responsibilities for compliance issue with wording in the sales contract in the charterparty and the bunker When the vessel is under a time charter, that confirms the obligation. sale contract: for example, English law at a minimum the following parties will and arbitration. That way, in the case be involved in bunkering: shipowner, The buyer is responsible for specifying of dispute, all three parties could be time charterer, bunkers broker and the quality ordered and should ensure brought into one proceeding. In the physical supplier. As a starting point, that the bunkers sale is ordered and real world, the contract between owner compliance with MARPOL Annex VI is confirmed as: “fully in accordance and charterer and the contract between the responsibility of the vessel owner. with ISO 8217 Third Edition 2005 and charterer and bunker supplier are both Ultimate liability for the consequences MARPOL Annex VI” and any other based on form contracts and favoured of off specification fuel, however, specific regional requirement for ports terms which may not be negotiable. may be subject to contract indemnity where the vessel will call. When fuel provisions commonly found in time is required for a SECA, the following P&I and Defence cover respond to charterparties, or liability may rest should be added: “and with maximum the with the supplier depending upon sulphur content of 1.5 per cent.” new risks the terms of a sales contract. At least Additionally, the contract should Gard’s Defence cover provides under English law, the bunker broker state that “the supply procedures compensation for legal and other is ordinarily considered the agent of shall comply in all respects with the costs pertaining to disputes related to the purchaser and is not a party to the requirements of MARPOL Annex VI MARPOL Annex VI non-compliance, bunker sales contract and is therefore regulations in respect of sampling and whether under charterparties or bunker not generally subject to liability. documentation including the bunker sale contracts, and whether pursuing delivery note”. or defending such claims. The Defence The time charterer is ordinarily obliged cover also includes fees and expenses to purchase the bunkers pursuant to It takes time to analyse fuel, so it due to claims by authorities for fines various forms of charterparty clauses. may not be practical or possible to whether they are presented directly or Typically a bunker clause will refer to a independently test quality before via a charterparty indemnity provision. specific grade of fuel that meets “ISO delivery. The bunker delivery note Gard’s lawyers and solicitors may also 8217 Third Edition 2005” specifications. requires the supplier to declare assist in advising members concerning This standard was amended in 2005 to the sulphur content of the bunkers contract provisions before a claim track MARPOL requirements, including delivered and MARPOL does not arises. the sulphur limits and elimination of require the supplier or the vessel to waste oils. Bunkers clauses would also analyse the product before acceptance Damage to the ship itself is not an typically warrant that bunkers supplied but, instead, merely requires sampling owners’ risk under P&I (but may be an by charterers comply with MARPOL and retention of samples for analysis insured risk under hull and machinery

3 See footnote 2. 4 See article “New BIMCO bunker fuel sulphur content clause” in Gard News issue No. 179.

© Gard AS, January 2014 24 insurance). Gard’s Comprehensive P&I cover for fines is narrow. Under Rule liability for delay is covered if in Charterers P&I Cover, however, includes 47.1.c, pollution fines are covered if consequence of damage to the hull charterers’ liability for damage to hull. they arise from an “accidental escape caused by off-specification bunkers. Thus, liability for physical damage to or discharge” of a pollutant from the Loss of use claims are of course subject the vessel caused by bunkers, and vessel. to the Defence cover with respect to de-bunkering costs, if in mitigation of owners and charterers. liability for damage to the vessel, are Fines for stack emissions exceeding the covered risks under the charterers’ MARPOL cap may not be considered Conclusion P&I policy. Liability for personal injury “accidental” in that the emission itself is The focus on air pollution, including due to toxic substances to persons on intentional. Fines may be considered for stack emissions reflected in the board or ashore is a covered P&I risk. discretionary cover on a case-by-case MARPOL requirements, will no doubt Rule 38 of Assuranceforeningen Gard’s basis under Rule 47.2, provided “the increase. Bunker quality claims under Statutes and Rules covers liability for member has satisfied the Association sale contracts and charterparties will pollution (with the exception of fines) that he took such steps as appear to the certainly grow in number and value. caused by stack emissions whether it Association to be reasonable to avoid Owners and charterers can meet is direct liability or via indemnity under the event giving rise to the fine”. these new challenges with practical the charterparty. Legal costs associated loss prevention measures on both a with any of these covered risks are also Finally, costs associated with delay, technical and legal basis. Gard is here picked up by Gard provided such costs detention and deviation are not to help its members meet the new are approved by Gard. covered under owners’ P&I. Charterers’ challenges.

Gard News 184, Marpol Annex VI - November 2006/January 2007 Solving the low sulphur issue By Olav Tveit, DNV Petroleum Services

With the entry into force of the North be sufficient when the North Sea SECA acceptable as 1.5 per cent. Currently Sea SECA there will be increased enters into force next year. this is left to the discretion of the pressure on charterers and operators to individual port and flag states. provide ships with low sulphur fuel oil. Needless to say, the pressure on charterers and operators to provide Some suppliers and certain testing Background ships with LSFO will increase. As companies introduce a default standard MARPOL Annex VI, Regulations for a result, bunker management will margin of error (reproducibility). It is the Prevention of Air Pollution from be more complex. It is also vital argued that deviations above 4.5 per Ships, entered into force on 19th May that owners/charterers and bunker cent or 1.5 per cent would be caused by 2005. MARPOL Annex VI Regulation purchasers ensure that MARPOL Annex a default margin of error during testing. 14 restricts SOx emissions from ships VI clauses (Regulations 14 and18) The problem is that the concept of by introducing a maximum sulphur are included in their charterparties margins of error has not been discussed content in marine fuels of 4.5 per and bunker purchase confirmations. at IMO so one can not say whether cent. In addition, MARPOL Annex VI INTERTANKO has developed contract authorities will accept any result above identifies SOx emission control areas clauses that may be suitable in this 1.5 per cent in a subsequent flag or port (SECAs). In these areas the maximum respect.1 state control. Hence, until further notice sulphur content of marine fuels used is it is recommended that any indication 1.5 per cent. The Annex also set forth Bunker quality of sulphur levels above 4.5 per cent requirements for documentation and In order to produce LSFO refineries or 1.5 per cent respectively should representative sampling of fuel oil. have the following options: be accompanied by a notification to – Use inherently low sulphur crude the flag administration, bunker port EU Directive 2005/33/EC deals with stocks. administration and supplier according issues similar to those in MARPOL – Invest in de-sulphurisation units. to the requirements of the IMO Port Annex VI, although its dates for – Blend to LSFO specification, using a State Control Guidelines for MARPOL implementation do not coincide with variety of cutter stocks, inland quality Annex VI.2 those of Annex VI. It also provides for LSFO or purchased inherently LSFO. a maximum sulphur content in marine Following the ISO 4259 standard, for gas oils of 0.2 per cent from 11th The blending option seems to be the a supplier to be 95 per cent confident August 2006. Further, there will be a preferred future method. Regrettably, it that the fuel delivered will have a reduction of sulphur content of marine appears that this option is also the one sulphur level of 1.50 per cent, the fuels for vessels at berth in EU ports, which could impact the bunker quality suppliers’ target should not be higher the entry into force date being 2010, in a negative way as explained below. than 1.42 per cent. with the maximum sulphur content from that date being 0.1 per cent. Other Increased stability and Considering the possible margin of implementation dates are as follows: compatibility problems error, as well as the aspect of fuel oil The more you blend, the greater the change-over, owners should consider On 19th May 2006 the Baltic Sea SECA risk of making products unstable. This whether a limit of 1.5 per cent in orders under IMO came into force. On 11th should be detected through fuel quality is sufficient or whether they should August 2006 the Baltic Sea SECA testing (total sediment potential). specify a lower sulphur limit. became enforceable by EU member However, if products are blended on states. On 11th August 2007 the North the stability limit, subsequent mixing on Increased levels of catfines (Al/Si) Sea SECA will become enforceable by board with an existing fuel with different With decreasing sulphur content there EU member states. On 21st November properties (e.g., viscosity, density) or may be an increasing level of catfines. 2007 the North Sea SECA enters into gas oil/diesel oil could lead to unstable This may be due to an increased use force under IMO. fuels and subsequent sludging. The risk of cycle oils as cutter stock in the fuel increases during LSFO change-over, blend (cycle oils are a low sulphur, Bunker management depending on system configuration. highly viscous refinery product which There is uncertainty as to whether tends to contain an elevated amount of suppliers will be able to meet the Sulphur content deviations catfines). demand for low sulphur fuel oil (LSFO) In some cases certain ports blend to the in main bunker ports world-wide. What sulphur limit of just below 4.5 per cent. Increased ignition and combustion is clear today is that operators with a From time to time, the 4.5 per cent limit problems contract for LSFO in general have their may be exceeded, although marginally. Increasing ignition and combustion demands covered by the majors/larger problems may also occur when using independents at main bunker ports at a Some samples tested also exceed the LSFO. This could be related to an premium of USD 30-50/MT. Fortunately, 1.5 per cent limit, although in most increased use of high density and it appears so far that the demand has cases only marginally. The IMO has not high aromatic cycle oils as cutter stock been met with respect to the Baltic Sea yet provided guidance as to whether during blending. SECA. There is, however, uncertainty an allowance can be made, like for as to whether world-wide supply will instance whether 1.54 per cent can be

Fuel change-over Fuel change-over contains both commercial and statutory compliance elements. On the commercial side, with a premium of up to USD 30-70/MT, the change-over from normal to LSFO and vice-versa should be as fast as possible. On the statutory compliance side, owners need to be confident that the crew has managed to change over from normal to LSFO before crossing the SECA boundary.

With a high sulphur limit of 4 per cent and a LSFO level of 1.49 per cent, reaching the required 1.5 per cent limit will take time, if it can be done at all.

Bunker deliveries administration to require the ship Although not yet specifically required, MARPOL Annex VI has not yet been to deviate due to a possible non- realistic and proven change-over subject to significant enforcement compliance for which a supplier is procedures should be developed for and as such the stringency applied responsible. The operator should each ship or group of ships with similar is uncertain. It is recommended therefore request that the ship be fuel tank configuration and system that ships adhere to the MARPOL permitted to proceed to the next port set-up. Annex VI sampling procedures and of call. documentation requirements as laid – The operator should agree with the The pre-requisite for change-over is down in IMO Resolution MEPC 96(47).3 flag state administration regarding the exact sulphur level of existing fuel At the recent IMO MEPC 54 meeting verification testing of the on board and LSFO, i.e., a bunker delivery note a circular was adopted urging IMO MARPOL sample (the on board sulphur level set as “less than 4.5 per member states to ensure that bunker MARPOL sample is the official cent” and “less than 1.5 per cent” suppliers within their jurisdiction apply sample which is legally binding). If the should not be accepted as it creates this resolution. supplier’s MARPOL sample has not uncertainty regarding change-over time been taken in accordance with the IMO (in addition to uncertainty regarding As a minimum, the crew must verify the sampling guidelines, then the operator the selected base number (TBN) of the sulphur content in the bunker delivery should propose to test the ship’s cylinder lube oil used on board). notes and that the official MARPOL MARPOL sample (if taken) as well. It is sample is representative of the bunker the prerogative of the administration Some owners have converted their supplied. In accordance with the IMO to select an appropriate laboratory ships by dedicating a bunker tank to Port State Control Guidelines for for the purpose of verification testing. LSFO with separate bunker line, as well MARPOL Annex VI, any non-compliance However, the administration should as introducing separate LSFO service must be reported through a notification be encouraged to select a laboratory and settling tank with piping ensuring to the flag state and the bunker port which is accredited with respect to split separator operation. This option authorities. the ISO sulphur test method and means that the change-over can be has documented experience with carried out quickly. High sulphur fuels fuel testing. The laboratory should, It is of vital importance that operators in addition to sulphur, also test for However, the majority of ships have specify and crew verify that the sulphur fingerprint parameters such as density, conventional fuel oil systems with a level in the bunker delivery note is viscosity, nickel and vanadium. The limited number of bunker tanks and below the respective MARPOL limits. MARPOL sample should be forwarded only one service and settling tank. For to the laboratory in question. The these ships the main contributors to In the event a fuel testing company result is to be communicated to the change-over time are the following: detects a sulphur level which exceeds administration, which is subsequently – Total consumption (main engine + the MARPOL limits and is above that obliged to inform the bunker port state auxiliary engines + boilers). specified in the bunker delivery note, administration. – Total volume of high sulphur fuel oil the following course of action should – In case non-compliant fuel is remaining in piping systems, settling be taken: detected, de-bunkering is not the only and service tanks prior to change-over. – A notification should be sent to option available. As an emergency – Initial high sulphur level and LSFO the flag state and the bunker port measure, provided existing fuel is on level. authorities, highlighting the indicated board and it is verified compatible with – Transfer pumps capacity. sulphur level deviating from the bunker the new fuel, the owner may request – Separators capacity versus total delivery note level. acceptance for on board blending consumption. – It would be unreasonable for the (depending on sulphur differences,

1 For details go to www.intertanko.com. 2 www.imo.org/includes/blastDataOnly.asp/data_id%3D12749/472.pdf. 3 A copy can be found at www.intertanko.com/pdf/weeklynews/MEPC%2096-47%20Resolution%20-%20Bunker%20sampling. pdf#search=%22IMO% 20Resolution%20MEPC%2096(47)%22.

© Gard AS, January 2014 27 Cylinder lube oil experiencing any excessive deposits or two of these prototype concepts have Oil and engine manufacturers wear. shown very promising results. Some have varying requirements and manufacturers have shown increasing recommendations. In general there are However, some owners have decided to interest in the commercial feasibility two alternatives related to cylinder lube make modifications on board and install of exhaust gas cleaning concepts. oil during LSFO operation: redundant service tanks: one for TBN 70 Needless to say, it will be some time – Feed-rate regulation. and one for TBN 40/50 with a three-way before they are commercially available. – Change of cylinder lube oil. switch-over valve in-between. One additional challenge is future Some shipowners have flagged their Regardless of alternative chosen, it is requirements (particularly EU and US intention to continue operating with recommended that the crew perform requirements) for handling of waste TBN 70 cylinder lube oil at LSFO down periodical checks of cylinder condition water from such units before discharge to 1 per cent, by feed-rate regulation, (including ring-pack) shortly after to sea. provided not already on the limit. change-over. As always, the quality of This alternative also appears to be the cylinder lube oil regarding thermal Although the investment is high, supported by engine manufacturers, stability, detergency and dispersion is exhaust gas cleaning systems have provided the operation on LSFO is also essential. the advantage of eliminating the limited to approximately 1-2 weeks. LSFO premiums as well as bunker Abatement technology (exhaust management complexity. Further, they There are, however, examples of gas cleaning) will reduce the particulate matter in the shipowners who have operated with Recent developments are encouraging, exhaust, for which new legislation is reduced feed rate on South American as at least three concepts are now coming soon. LSFO for instance down to 0.5 per cent in a prototype test stage either on over approximately a month without board ships or on test beds. At least

Loss Prevention Circular Marpol Annex VI – No. 06-06 Challenges in operating on low sulphur fuel

Background Sea Area is the first area designated • Supply and storage for low sulphur International regulations to control as a SECA under the Protocol and fuels harmful emissions from ships’ exhausts will permit a maximum 1.5% sulphur entered into force on 19 May 2005. content in any fuel used onboard. In Lube oil related issues MARPOL Annex VI contains provisions 2007, the second SECA, covering the • Matching cylinder oil BN fuel sulphur allowing special “SOx Emission Control North Sea and English Channel, will level across operating conditions Areas” (SECAs) to be established with be come into force, requiring similar • Possible additional storage tanks more stringent controls on sulphur sulphur levels. • Cylinder lubrication monitoring emissions. In these areas, the sulphur • Cylinder oil feed rate content of fuel oil used onboard The effects of low sulphur fuel ships must not exceed 1.5% m/m. There are several implications of Operations related issues Alternatively, ships must fit an exhaust operating on low sulphur fuel or • Monitoring sulfur content in fuel gas cleaning system or use other altering between high and low sulphur • Engine load methods to limit SOx emissions. The fuels. The issues listed below are some • Cylinder Liner Temperature regulation requires any such alternative of the most common challenges that • Water content in scavenge air methods to be approved by the must be considered by the shipowners relevant flag state. Sanctions for Marpol and operators to avoid problems Recommendations violations are becoming increasingly related to operation and maintenance Shipowners and operators should severe around the world, and there is of the ship engines. thoroughly consider all undesired no reason to believe Annex VI will not effects of operating on low sulphur be treated to the same scrutiny. Fuel related issues fuel. It is recommended that the engine • Incompatibility of different fuels makers and the lube oil suppliers are The regulation allowed for a 12-month • Combustion characteristics and contacted to obtain their detailed period from the date of entry into force impact on engine deposits and wear instructions and guidelines. Specifically before the limits within a SECA could • Varying fuel viscosity, and impact on worded charterparty clauses regarding be enforced, and they will thus be fuel injection bunkers supplied by Charterers are enforced from 19 May 2006. The Baltic • Low sulphur fuel having less anti-wear important to ensure that any problems capability are avoided.

Gard News 174, Off-spec bunkers – Some May/July 2004 practical cases

Gard has recently assisted two charterers the ship’s plans, there was no direct oil was mailed to Det Norske Veritas in the handling of claims arising from connection between them and no ballast Petroleum Services (DNVPS) for analysis. delivery of off-spec bunkers. These pipes were routed through the fuel tanks. A fuel quality report was sent to the cases show how important it is for both There was also no evidence of oil in the owners, which showed a Total Sediment charterers and owners to have a good ballast water. Furthermore, the tanks were Potential (TSP) of 0.22, the standard TSP bunker testing system in place. reported to be tight and in order during being 0.10. DNV advised that at this level a recent overhaul. This possibility was of TSP, increased sludging was likely to Damage to fuel injection pumps therefore ruled out. occur and fuel stability was at risk. They The first case concerns a general advised the owners to purify the fuel, cargo vessel, whose main engine had The surveyor’s conclusion was that the not to mix it with any other fuel and to undergone a complete overhaul whilst damage was probably caused by water take and retain periodic samples before the vessel was dry-docked. The bunker in the fuel. and after centrifuging and record the tanks were cleaned and all sediment sampling details in the logbook. removed. Following that, the vessel Based on the entries in the engine took delivery of 170 MT of bunkers room log book, it was evident that there Charterers were put on notice that at Rotterdam for a round trip to the had been a certain quantity of water in owners held them responsible for Mediterranean and return to Norway. The the fuel oil tanks No. 6 starboard and the consequences of supplying off- bunkers were put into fuel oil tanks No.6 port. How the water entered the tanks, spec bunkers, including the cost of starboard and port and, in accordance however, had not been established. de-bunkering if required and any with the Baltime charterparty, were damage to the vessel’s engine. The provided and paid for by the charterers. The owners put the charterers on notice head charterparty included detailed that they held them responsible for all and comprehensive clauses concerning When the vessel started to take fuel from costs incurred and time lost during the responsibility for delivery, quality, testing tanks No. 6 port and starboard during period the vessel was out of service and analysis of bunkers, but these clauses the voyage, she experienced severe due to supply of inferior bunkers. The were not included in the sub-charter. problems with sediment. The problems charterers in turn held the bunker continued for the rest of the trip and on supplier responsible. The vessel sailed for Richards Bay to load arrival in Kristiansund, Norway, assistance a cargo for Praia Mole, Brazil. During from the engine manufacturer was The bunker supplier rejected liability, the voyage, the master advised that needed. A without prejudice joint survey relying on an analysis of a sample of the the vessel was experiencing a critical was arranged, which was attended on fuel oil taken from the vessel after the situation on board in trying to purify the behalf of the owners, charterers and bunker delivery. This analysis confirmed off-spec bunkers. For safety reasons, bunker suppliers. Fuel oil samples were the bunkers delivered to the vessel were he decided to deviate to Port Louis, taken from the relevant tanks, a survey within specification. The test sample Mauritius, which was the nearest port of the vessel’s engine and all relevant taken from the bunker barge had with enough bunkers to enable the ship machinery was performed and an been lost and samples from the fuel in to reach Richards Bay safely. The owners investigation into the cause, nature and tanks No.6 port and starboard which requested charterers to make provisional extent of the damage was carried out. purportedly showed that they were arrangements for contaminated with water, could no longer de-bunkering. Charterers put the sub- The engine manufacturer’s representative be traced. charterers on notice, requested them to concluded that all 18 fuel injector pumps make the necessary arrangements to take had to be replaced. The damaged Fortunately for charterers, in this case the inferior bunkers ashore and re-supply pumps and valves were sent to the the owners did not have a system in at Port Louis. The sub-charterers did engine manufacturer’s plant in Denmark place to take bunker samples for analysis not admit any liability for the problems for overhaul/repairs, and a joint survey when bunkering, so no samples of experienced by the vessel, but advised was also carried out there. Sixteen of the bunkered fuel were available. As a they would appoint a surveyor to inspect the fuel oil pumps were dismantled result, the owners had no evidence and the vessel and bunkers. for further examination. Fifteen of therefore no case against the charterers the pistons were found to be brown- and had to bear the losses. Accordingly, the charterers had little coloured, one was found to contain water choice but to arrange delivery of fresh drops, some were found with corrosion High Total Sediment Potential bunkers at Port Louis, so it was decided and several pump hoses contained water. The second case concerns a 1995-built to de-bunker the off-spec bunkers at Due to the corrosion and browning, the bulk carrier which was time-chartered Richards Bay. Charterers invited the manufacturer advised replacement of all under a NYPE 1993 form. The vessel was shipowners and sub-charterers to take the sub-chartered and upon re-delivery sub- part in a survey of the vessel’s engines pistons and cylinders, which were charterers supplied the vessel with 900 and purifiers at Richards Bay and replaced with reconditioned fuel oil MT of IFO, which was taken into DB tanks a without prejudice joint survey of the pumps. Nos. 1 and 2. sealed samples held on board by the master for charterers’ use was arranged, It was considered whether there could The shipowners had an agreement with and the fuel in the vessel’s tanks was have been leakage between the ballast Det Norske Veritas (DNV) for testing tested. and fuel oil systems. According to bunker samples, so a sample of the fuel

© Gard AS, January 2014 29 Owners and charterers agreed to use four days, five hours and 18 minutes. record all temperatures, pressures and an independent laboratory to analyse Charterers claimed from sub-charterers remarks of engine performance on a daily the fuel oil samples. The sub-charterers the cost of the calls at Port Louis and basis. appointed a different laboratory to Cape Town, the cost of removing and carry out their analysis. Surveyors were replacing the off-spec bunkers, the cost If off-spec bunkers have been delivered instructed to attend the laboratory to of repairs to the purifiers, the time lost, and are unsuitable for use they should witness the sample analysis. The owners costs of the surveyors and fuel experts as be off-loaded and replaced by new on- and charterers’ surveyor monitored the well as legal costs, which amounted to a spec bunkers. If inferior bunkers have to analysis done on behalf of the sub- total of USD 182,000. Legal proceedings be used or have been taken in use the charterers and vice versa. In addition, an were commenced but immediately prior following should be done: analysis was also carried out by a third to the hearing the case was settled by – The vessel should notify the shipowner independent company. sub-charterers for USD 150,000 plus immediately if they are experiencing recoverable costs of GBP 35,000. problems with an off-spec fuel. If the Owners and charterers’ analytical report shipowner purchased the fuel directly from tanks Nos. 1 and 2 confirmed a TSP Lessons learned from the supplier, he should notify the of between 0.13 and 0.21. The analysis of Shipowners – and charterers, if they bunker supplier and send a copy of the the sub-charterers and the independent supply bunkers to a vessel – should test results. laboratory showed TSP of between 0.04 always:1 – The shipowner should contact an and 0.05. According to technical experts, – Be selective when choosing a supplier. expert and make use of reliable fuel however, the analysis method used by Order fuel to desired ISO grade and testing services such as DNV Petroleum sub-charterers and the independent describe it in the charterparty as well as in Services (DNVPS) or Lloyds Register laboratory was unacceptable as the the requisition to supplier. (FOBAS) to obtain advice on how to tests were not in accordance with IP 390 – Take representative samples at the time proceed to solve the particular problem specifications, in which case, the fuel oil of delivery and agree with the suppliers to avoid damage and mitigate losses. supplied was indeed off-specification. that the samples are representative. – The shipowner should contact the Ensure that the samples taken are engine manufacturer as well as fuel The vessel had three IFO tanks, two properly labelled. supplier for advice. Action will depend large ones and one smaller one. The – If the supplier takes other samples at on which parameter is off-specification third, smaller, tank was not big enough the time of the delivery, try to establish and/or what the particular problem is. to take the amount of bunkers required how and when they were obtained. The degree of quality deviation from the for a safe passage to Praia Mole, so since Protest if not invited to witness the taking specification must be considered. it proved impossible to arrange de- of these samples. – The shipowner should notify the bunkering at Richards Bay, there was no – Use a fast, reliable testing service to charterer (if the charterer purchased the other alternative but to proceed to Cape analyse representative samples. fuel) and other interested parties. Town and de-bunker there, thus incurring – The parties should inform their insurers. further costs and delay. Tank cleaning Owners should also: was not possible because the vessel was – Segregate new fuel from that held on Conclusion loaded with coal, which meant access board. These two cases illustrate the importance to the tanks was blocked. However, a – Never use new fuel until the analysis for shipowners and charterers of having bunker quality/quantity survey of the 675 results have been examined and it has in place a good system for testing bunker MT of fresh bunkers put on board was been established that it is suitable. quality with a reputed organisation, as carried out. – Maintain careful reliable daily records of well as having protective contractual the contents and consumption from each clauses in charterparties. Fortunately, the off-spec bunkers caused fuel tank. no damage to the vessel’s engine, – Ensure good maintenance and auxiliary engines or purifiers. However, calibration records are kept for all the total distance deviated from the machinery. voyage was 1,074 nautical miles, involving – Ensure engine log books properly

Gard News 165, Controlling bunker costs February/April 2002 By Ivar Tønnensen, Gearbulk (UK) Ltd, London; Member of the Executive Committee of the International Bunker Industry Association, Ltd,

Introduction the buyer and/or the crew. Depending Liner operators, who see their fuel costs Is it possible to make money on on the development of the bunker clearly, have implemented sophisticated bunkers? Yes, and not just by selling market, one can safely say that the purchase and management strategies them. Owners generally can not control bunker department is both loved and for bunkers. Tanker owners all too often their earnings, and are at the mercy of hated. But all too often companies leave it to the market. It is suggested the market when it comes to freight and have no actual bunker department, or that educated buyers who follow proper time charter rates. But they can control there is a difference of opinion within purchase routines with proper follow costs, and every cent saved on a direct the organisation as to what the bunker up, who know the market, and know cost like fuel is welcome. So you can department should actually be doing. whom they are buying from, will have a make money on bunkers, by cutting significant positive effect on the bottom costs. The chartering department usually line. looks upon bunkering a vessel as Bunker prices are just as much market- synonymous with a car pulling up If two shipowners are buying fuel in driven as freight rates, but the market to the local petrol station, and they the same market for a similar route, price of bunkers is far from the only usually need the fuel in a rush. The why can one get a better result than cost involved. Too many owners fail to management looks at the department the other? Because one employs staff realise that and give too little attention as the biggest spender in the that pay attention to where the money to bunker purchasing and management. organisation and is always asking: goes, and the other simply looks at the This article shows how attention to “couldn’t you get the fuel cheaper market price. Anyone with a trading bunkers can generate real cost savings, somewhere else?” The technical and instinct can play a market. Bunker and a real boost to bottom line results. operational departments treat it as management requires more knowledge a necessary evil and are constantly than that. Bunkers have always been an important complaining about the quality of the part of ship operations and, as such, fuel, and that it is always delivered Your money can go up in smoke without bunkering is a vital part of an owner’s outside office hours. But either way, pushing the ship one metre forward. day to day operation. Fuel costs have bunkers must be bought and therefore You may lose on the volume/weight become a major part of the running it is of vital importance for an owner conversion, or more simply, you may costs of a vessel – in some instances that the persons involved with fuel pay for more than you get because your as high as 60 per cent. This weighs purchasing have the necessary crew does not supervise and ensure the heavily on the profit margin and may knowledge on how, where, and when quantity is lifted correctly. You may lose lead to financial loss through lack of to procure the fuel in an efficient and money because the energy content of knowledge, skill or care on the part of economical way. your cheap fuel is much less than the

© Gard AS, January 2014 31 energy content of the expensive fuel the capacity of her bunker tanks. Thus, ISO 8217/1996/RMG35). ISO 8217 bought by the clever owner up the if the vessel is in a low cost area and is an efficient specification that calls road. You may lose money through going to a high cost area, it makes for a minimum of tests and expenses barges cheating you out of some of sense to bunker as much as possible, required to control a desired property, what you think you are getting. And provided draft, cargo intake, etc., and for tests which are as independent you may lose out on the headline price permit, thereby ensuring that one buys of each other as possible. Since this through not knowing this specialised as little as possible in the high cost port specification normally protects the and fast-moving market properly. if the vessel is returning to an area of buyer fully, accidental problems should Finally, you may lose an awful lot of time lower prices. be kept to a minimum. and money if you lift bad bunkers. Even if you win a subsequent dispute, it will Alternative bunker ports and time Having in mind the debate over the still hurt. Better to avoid problems in factor: The discharge port (inbound past few years on the issue of waste the first place. voyage) must be considered against the lube oil in the fuel, it may be prudent load port (outbound voyage), provided to add the following wording when The first step to better buying is to have they are in the same geographical specifying which fuel is required: a purchasing strategy. area and price range. One must also “The Seller warrants that the bunkers compare the economics of bunkering delivered under this contract do Purchasing while working cargo against bunkering not contain chemical waste, waste The purchasing aspect of the business en route in a typical bunker port. The lubricating oil of any kind or other can be broken down into three parts, rule of thumb is that one can calculate substances detrimental to the vessel, namely: 1) activities leading up to the at least 12 hours’ loss of time for a her engine(s) and/or her crew.” purchase, 2) the purchase itself and 1,000 MT stem. Time has a value, which 3) the control functions that must be together with port cost adds up to a However, “when” to purchase is often performed once the purchase has been cost per tonne of fuel to be bunkered. the big dilemma for the spot buyer. concluded and the fuel delivered. Needless to say, the smaller the stem, Timing may result in big savings, the larger the difference, since both depending on volume. There are no Pre-purchase time value and port cost are constant. set rules for “when” - it is normally a When a vessel is in need of fuel In addition, there is the weather factor. combination of “gut feeling”, market replenishment, it triggers a series Conditions may be such that it is information and luck. However, do not of events. It starts with the operator impossible to bring a barge alongside, think for a minute that you will be able approaching the bunker department thus additional time is lost. Hence, to strike when the prices are at the with a request for bunkers. Together, when comparing bunker prices at a bottom. Usually, when one thinks they look at the schedule of the discharge port or a load port with prices prices are at their lowest they are intended voyage and the various at a potential bunker port en route, it actually on the way up again, so the criteria indicating how much, where and may be advantageous to bunker while best time should be when they are on when the bunker is to be bought. Some working cargo in port, even if the price the way down, just before the market of these criteria can typically be: is higher than at the potential bunker bottoms out. – Intended cargo (freight v. bunker). port en route. – Ensuing voyage. If you use brokers it is recommended – Low priced market v. high priced Timing of purchase: “Should I buy to use a minimum of two. This makes market. today, or wait till tomorrow?” Many oil it more likely that the market will be – Alternative bunker ports. companies only give quotes valid for covered properly and, most important, – Time factor (deviation, time to a maximum of seven days. However, if gives you the necessary leverage to bunker). you can narrow the time for lifting the obtain the best price possible. However, – Timing of purchase. bunker to one or two days, firm quotes you should ensure that each broker may be obtained sometimes up to covers different suppliers, as otherwise Intended cargo: The freight rate two weeks in advance. The drawback, the market becomes confused. The must be considered against the price unfortunately, is that the price may fall Internet is as yet only a limited option, difference of the fuel between the load again. Just be aware that entering the but you can use it to check what brokers port and discharge port. If the price market too close to the lifting date may are saying. of fuel at the load port is lower than at pose problems, after all, the barge must the discharge port and the difference be loaded, the supplier must prepare Once in the marketplace, consider in price is greater than the freight rate, documentation, etc. The suppliers which possible suppliers you will or can it is more economical to take fuel than may even be sold out, or committed use. Have you used them before, are cargo. to other vessels, forcing you to let the they newcomers to the market, are they vessel wait. Fifty cents on the dollar traders or actual suppliers? What is their Ensuing voyage: One must also saved going into the deal may easily reputation, how do they handle claims? take into consideration what are the cost you much more at the end of the If you do not know all the answers, intentions for the following voyage. As deal. This should also be kept in mind ask the brokers. Remember that the indicated in the introduction, bunkering when choosing a supplier. supplier has the same attitude towards a vessel is not like driving a car into the you, hence asking questions is a vital part of the trade. local petrol station. Your vessel may Purchase end up in a port where the fuel is very Once a decision on where and how Another method to differentiate expensive, or in the worst case, there is much to purchase has been made, one no fuel available. between sellers is to look at the energy may proceed with the order. This can content of their fuel. When converting be done in several ways: directly with their offered price into cost per mj/ Low priced market v. high priced the supplier, via one or more brokers, kg an interesting picture emerges. Let market: It is also important for the or via the Internet. Irrespectively, it us assume supplier A offers USD 150/ purchaser to have a good knowledge is important to indicate clearly the MT and supplier B offers USD 147.50/ of the bunker market. Every vessel has type of fuel needed, referring to the MT. You know from past history that a certain steaming range, based upon relevant ISO Standard (e.g., 380 CST, A’s oil has an energy content of around

© Gard AS, January 2014 32 41.2 mj/kg and that B’s level is around oriented publication and as such not 39.9 mj/kg. From the outset, one widely known among buyers. Either would assume seller B is the cheaper way, the question really becomes: alternative. However, seller A is actually “how much are we willing to sacrifice the best buy, as seller B would have to on the price for the benefit of quality lower his price to USD 145.27 in order and service?”. Only you can answer to match A (USD150: this question, but if your answer is 41.2 x 39.9). “nothing” then you are certainly going to lose money on bunkers. When you have decided which supplier(s) you would like to deal with, Post-purchase you must negotiate the price and You have now placed a stem with conditions under which the fuel is to a supplier and the fuel has been be delivered. With respect to the latter, delivered as requested. Then comes the you may discover that many suppliers task of checking whether the vessel has refuse to negotiate their terms of sale, received what was ordered and paid for. but one should always try. Quite often This will be discussed in more detail one will find that a supplier is more a little later on, but the importance of willing to negotiate an addendum to properly instructing the crew on what to the terms of sale than to actually alter do prior to, during and after bunkering, the printed text. Some call this process especially with respect to the sampling, “Dutch auction”. Be that as it may, the should be stressed. The sample is the is final and binding for both parties. buyer’s function in the company is to sole evidence of the quality of the fuel Again, it is important to properly obtain the best quality fuel for the most delivered and becomes the focus in a verify that the sample is true and reasonable price delivered at the time quality dispute.1 The standard questions representative, because in the end it one has requested and agreed. to the chief engineer are: “how, where can mean money. and when were the samples taken, Most large buyers of fuel do part and did you witness the process?”. In Another item to look out for is correct of their purchases on a spot basis, virtually all terms of sale it is the sample temperature conversion, which can be while other portions of their overall retained by the barge that is to be re- illustrated as set out in the left table to requirements are met by short and/ tested, so the importance of properly the left. or long term contract(s) with one or witnessing the sampling is evident. more suppliers. The contract can cover There are tables explaining which factor a specific grade or port or an area, There are only two items the crew to use when adjusting for temperature depending on the overall trading can correctly verify: the volume and and it is strongly recommended that pattern of the owner’s fleet. Since temperature of the fuel, and both are they be used. As a general rule, it is monetary savings are the exception important as they, together with the recommended not to pay an invoice rather than the rule with regards to density, are the basis to determine the which is not accompanied by a copy contracts, there are basically two major weight which the invoice is based upon. of the bunker receipt, or at least hold reasons for entering into contracts: 1) Since you can not witness all bunkerings off on the payment until the receipt is quality and 2) availability. We all like yourself, the crew becomes your ears received – otherwise the invoice can to buy top quality fuel every time, as and eyes on the spot, and their report, not be controlled properly. A word this reflects on the maintenance costs. together with the delivery receipt, is of of caution, though: always pay the Hence, one would tend to enter into importance for the final control of the undisputed amount. contracts in ports with questionable invoice. quality and go spot in ports where good quality fuel is always available. Hedging Likewise, with regard to availability, The sample should always be tested at Hedging has been used in the bunker one tends to contract in ports which an independent laboratory. There are industry for many years, but only are strategically located where one obvious reasons why. Firstly, to know if recently has hedging reached the must have fuel in order to perform the the quality is according to specifications popularity it presently enjoys. While voyage. ordered and secondly, to find out if the it was basically the oil companies that weight is correct. Based on experience offered owners hedging instruments This applies especially to the liner it can be said that the tested density is in the past, today banks, trading trades. The benefit of contracts is seldom equal to the density declared houses and others have jumped on that one always deals with the same on the delivery receipt. Large variation the bandwagon. They offer hedging supplier, the parties know each other’s means that you are paying for fuel that in commodities such as crude oil, requirements, quality and quantity you have not received, or have received heating oil, jet fuel, gas oil, etc., but as disputes are rare and so is the hassle more fuel than what is stated. This can an owner, one should concentrate the of solving them. But you do not get be illustrated as follows: hedging in fuel oil. In general, the main something for nothing, so you may rule should be that one hedges in the experience that prices may not be product that the vessel burns. as advantageous as if you went into One can easily imagine what this may the spot market. Normally pricing is amount to over the years, if the fleet Here are a few thoughts (from an based on Platt’s Bunkerwire and it is sizeable and it happens a few times owner’s point of view) on why and how may be Platt’s average for the port per vessel. However, it can also happen to hedge. or area. Some suppliers use monthly the other way around, in which case averages, some use weekly or even one must add the extra weight when When looking at the futures market, it the issue published closest to lifting controlling the invoice. Normally, when is important to distinguish between the day. Contracts are also known to have you are faced with large differences in paper and the physical market. In this been entered on the basis of Platt’s density, a re-test of the retained sample connection, the physical market means Marketscan, which is a commodity- is called for and the result of this test that one buys a pre-determined amount

© Gard AS, January 2014 33 of fuel at a set price for delivery at a are that one has full coverage on the and just to name a few points: specified period. The paper market, upside, and at the same time can take – Streamline the broker network. however, differs from the physical full advantage of the lower priced fuel – Avoid confusion in the marketplace. in that one settles one’s positions in plus a cost factor that is locked in. The – Easier to develop/maintain internal cash, either way, and no physical oil drawback, however, is that one must database. is involved. You should always keep pay the total premium up-front, which – More “clout” in the marketplace. the objectives in mind when you enter may influence the overall cash flow. The – Better buying practices. the paper market: speculation or premium is based on several factors insurance? such as volatility, time period, base One comment heard from a buyer is: price of the product, interest rate, etc. “but we can not afford to have a bunker In general terms, one should look upon The general principle is that the further department ...”. The answer is simple, hedging as insurance. This means best away the strike price from the market it is not a question of establishing a possible coverage at minimal cost and price, the lower the premium. “new” bunker department, it is just a risk. matter of taking one of the persons There are other instruments available who presently buys and letting him or What do we hedge? Primarily the and it seems that there is no end to her buy for the whole fleet. bunker prices in the annual budget, some of the players’ imagination. but it can also be the bunker prices in For those of you who are not familiar On board handling and claims a freight contract or even the bunker with hedging, but would like to get You buy the fuel carefully, but things consumption for a vessel taken on time involved with it, take time to learn can go wrong on board. It is vitally charter. the differences between the various important to have a clear bunker instruments available. Learn the policy for the crew, and to make sure difference between Platt’s Bunkerwire it is followed every time. Firstly, for If a cargo contract already has a bunker and Platt’s Marketscan, as it is on the clause built into it, that in itself is a latter that most hedges are based. hedge. However, one should note that a bunker clause in a freight contract might be converted into a hedge. If Irrespectively, keep in mind that you are the buyer and it is your needs that have Measured volume ex barge is a bunker clause is an asset for an owner, 1,850 cbm at 35°C. Density on it is a liability for the charterer, for which to be covered. “Here is my problem and what can you do to help me? What delivery ticket is 0.964 basis 15ºC. he may be prepared to pay additional It is easy to say: freight to get out of. The owner can use are the benefits and drawbacks with the the extra few cents to the freight to buy particular instrument you propose?”. 1,850 x 0.964 = 1,783.4 MT. an option. This can be illustrated as in One has, unfortunately, heard too many the above table. stories of owners who hedge in crude However, the correct picture is: oil, etc., with a strike price based on a When the decision has been made port or an area they do not even call. 1,850 cbm at 35°C = 1,823.73 cbm to hedge, the next question is what at 15°C x 0.964 = 1,758.075 MT. instrument to use. There are different Organisation instruments available, such as swaps, After discussing efficient purchasing caps, participation, etc., but common to practices it is prudent to also say a few This gives a difference of 25.324 them all is the element of risk, and do words about how the shipowner or MT. (1,783.4 – 1,758.075 = 25.342). not forget, you still have to pay market operator organises the fuel purchases. Multiply this by USD 150 and you price for the fuel. There appears to be two ways buyers get a difference of USD 3,798.60 – handle this task: either they let each again, money paid for something operator buy fuel for the vessel(s) it not received. The two most commonly used handles or they have designated one instruments are swaps and options. person to perform this task. While there Swaps are possibly the most used way is not much to say about the former, of hedging. The main principle is that there is much to be said about the latter one agrees on a strike price with a set volume over a certain period. In other words, buy in the future at a price set today. The benefits of this instrument are that you are fully covered if the The supplier claims he has delivered 1,500 MT based upon a density of price goes over the strike price and 0.990. However, the test shows that the actual density is 0.978. The formula there is no premium to pay. The to calculate the actual quantity is quite simple: drawback, however, is that if the price Using the above formula, the calculation becomes: falls below the agreed strike price, you are faced with the opportunity loss and this cost is an unknown factor in the overall budget. A swap makes sense in a low market when the downside potential for cash payoff is low.

The main principle in options is that one buys the right to a product at a set price for a set period at a set time. One If the price was USD 150/MT, there has been an over-payment of USD 2,727. buys the right, but not the obligation to buy. With this instrument the benefits

1 See also articles “Some technical aspects of marine fuels testing” and “Effects of off-spec bunkers” elsewhere in this issue of Gard News.

their safety. Secondly, because a small accident while bunkering will often lead (A x B):(C x D) = E to a small oil spill right under the noses A: Total cargo to be carried. 500,000 MT of the authorities, which will become B: Freight increase per ton. USD 0.05 a considerable and very expensive C: Bunker consumed per voyage. 1000 MT problem. So your first priority must be D: Number of voyages for the contract. 10 to ensure that the crew follows correct E: Option premium per MT. USD 2.50 routines to prevent safety problems or pollution. These are well documented, and should be in your ISM system, but it is easy to cut corners at night or in less regulated ports. Do not allow it to happen. challenge by the Buyer of the said The crew should always make proper measurement shall only be admissible remarks on the delivery receipt, as the Whatever you do, sooner or later if made to the Seller’s representative supplier will use it later against you you will be faced with a claim. Types and noted on the delivery receipt at as evidence. Preventive measures are of claims will vary, but there are two the time of delivery and confirmed in the best way to fight and/or eliminate major: quantity and quality. Of these writing by the Seller within 14 days of quantity disputes. two, quantity may be rated as problem delivery.” number one, followed by quality. Unfortunately, quality disputes are Faced with such a clause or similarly unavoidable and measures are similar As discussed earlier, the quantity worded clauses, a buyer must exercise to those applicable to quantity (weight) is based upon volume and its right to be present or represented disputes. Preventive medicine is the density at a set temperature. at the measuring. Fortunately, most important feature. What is then measurement at storage tanks ashore the prescription? A classic scenario is that the barge is about to be a thing of the past, but – Be selective in choosing a supplier. claims it has delivered a certain volume, measurement at barges is very much a – Always test the fuel. the vessel claims it has only received reality. One can always have a surveyor – Do not use the new fuel before the so much and we have a dispute on our present, but many owners look at the test result is available. hands. How do we solve this? Firstly, let cost issue and leave it to the crew to – Avoid mixing new fuel with old fuel in us take a look at a common clause used perform this task. Things to watch out the same tank(s). in terms of sale: for are: – Ensure that the samples taken are “Quantity shall be determined at – Correctness of calibration tables. as representative as possible and that Seller’s or Seller’s supplier’s option from – Ensure that actual measurement is they are properly labelled. They are the the gauge or meter of shore or barge carried out by the crew, and that they sole evidence of the fuel the vessel has tanks. The Seller’s determination of report it to the head office. received. quantity shall be final and conclusive, – Note the temperature and make but the Buyer shall have the right to sure it matches what is on the delivery But even after having done all of the be represented at the measuring. Any receipt. above, you may still be faced with a

© Gard AS, January 2014 35 dispute. The nature of the dispute, Conclusion for suppliers, or for buyers. It is a forum more often than not, dictates which Certainly there are those of you who for everyone dealing with bunkers. IBIA actions you must take. It is always feel that important points have been offers free training courses all over the preferable to try to solve a dispute left out of this article. They probably world to bunker buyers, it publishes outside the courtroom, and experience have, but it is hoped that the few numerous guides to good practice and shows that most suppliers share the issues raised may point you in the right its officers can help with both simple same point of view. It then comes down direction. A good piece of advice, and technical bunker questions. There to your negotiating skills. However, though: make sure the person who buys is a reservoir of expertise to tap into, should the dispute be of such a nature your fuel learns from past mistakes. both to help avoid problems and to that the courtroom is unavoidable, Look at old claims and analyse them resolve any that arise. A call to IBIA will make sure that all communication for the purpose of determining what add to your bottom line because by between you and the other parties went wrong and what must be done to knowing more about bunkers they will involved is in writing. In this day and ensure it does not happen again. The cost you less. Money saved is money age too much is done via the telephone result may be frightening, but it sets earned. and when you are in the heat of the in motion a process with the ultimate battle, maybe a year later, it is hard to goal of overall improvement of routines, remember who said what to whom. It both in the office and on board. only takes a few minutes to summarise the contents of a telephone call in Where to go for help writing and send a copy of your notes To some owners, the contents of this to the person you spoke with. Get into article will be familiar stuff. But to many, the habit of doing it. Hearsay, or “I think the idea of a sophisticated approach to I said...” unfortunately does not help bunkers will be novel. Where do you go your case. Keep in mind that in the for help? The first port of call should be end what is written down will be your IBIA, the International Bunker Industry strongest evidence. Association.2 This is not a trade body

2 For further information look at http://www.ibia.net/.

Gard News 156 Liquid gold - Fuel oil and December 1999/February 2000 lubricating oil By Lindsay Gordon, Gordon, Giles & Company Ltd, London

INTRODUCTION Rule No. 4 (2) Never exceed the flow rate Poor quality fuel oil or lubricating oil Employ the services of an independent recommended for the centrifuge in an engine can result in damage or fuel analysis contractor, e.g., Lloyd’s for the grade of fuel in use. The breakdown. In relation to the high cost Register, FOBAS (Fuel Oil Bunker lower the flow rate the better the of these essential products, testing and Analysis & Advisory Service), Det efficiency. Consider using two or careful handling on board requires little Norske Veritas – Veritas Petroleum three centrifuges in series/parallel effort and minimal cost. This article Services. The cost is a few hundred as purifier/clarifier. considers these aspects. dollars and test results are usually available within 36 hours. (3) Centrifuging is still recommended FUEL OIL for the distillate fuels, MDO/MGO, The advice below applies to fuel oil and Note: Regardless of whether the as the fuel may be contaminated in diesel oil. service of an independent fuel analysis the storage tanks. contractor is utilised or not, an owner BUNKERING should ensure that the Chief Engineer (4) Keep the fuel temperature There are a few “golden rules” to be takes a continuous drip sample at about 10°C above the minimum observed when bunkering fuel oil. the manifold throughout the entire storage temperature, to minimise These are as follows: bunkering procedure. The equipment the risk of wax formation and necessary to do this is relatively small the temperature after the final Rule No. 1 cost compared with the cost of the heater 5°C to 10°C above the Always order fuel according to the bunkers. recommended fuel injection engine maker’s recommendation, using temperature to compensate for the industry fuel oil standard ISO 8217. Rule No. 5 heat losses between heater and This requirement should be included in The Chief Engineer should check fuel injector. the charterparty. For each fuel category that the bunkers to be loaded do not within ISO 8217 the characteristics contain an unacceptable amount of (5) The temperature at the purifier are given as maximum values with the water. In the case of distillates, a simple should be steady – a typical exception of flash point and for this test involving a dip tape and water optimum temperature is 98°C. reason it is not sufficient to only refer to finding paste can be used. For fuel oil Note: Temperatures at storage, ISO 8217. this may not always be accurate and settling and service tanks should a water test kit can be used. The kit is be monitored at least twice daily. Rule No. 2 cheap and simple to use. Overheating can degrade the fuel and result in cargo damage in Check the supplier’s paperwork to holds. ensure that the delivery conforms in Note: If the bunker supply is from a terms of quantity and specification with barge, a Chief Engineer should be (6) The importance of operating the what has actually been ordered. wary if the supply is continually being circulated in the barge tanks. The settling and service drain test cocks is often overlooked, particularly in Rule No. 3 circulating process may be disguising a nasty cocktail! unattended engine rooms. Twice a Whenever possible, place new bunkers day is the minimum for this simple into empty tanks. New fuel oil should HANDLING FUEL OIL operation, which will reduce the not be used until analysis results have risk of water or sludge entering the been received. Heavy fuel (residuals and mixtures of residuals and distillate) must be fuel system. purified in an efficient centrifuge before Note: Even when it is possible to (7) Fuel oil filters should be examined, do this, it is essential that the Chief entering the service tank. There are several key points. say, every few days in service – Engineer carries out a compatibility even if the differential pressure test. Simple, cheap test kits are (1) Ensure that the correct gravity disc is used. gauges are normal. The reason available. for this is twofold. First, a filter will often allow fuel to pass even when partially choked. It can then suddenly choke completely. Second, although Class Rules require a standby filter to be available, difficulties have been encountered in changing over to the standby filter in an emergency situation, resulting in engine stoppage.

An on-board portable fuel test kit.

© Gard AS, January 2014 37 (8) An automatic viscosity controller (2) Lubricating oil is not technically (viscometer) should be in proper clean when supplied and, working order to maintain correct inevitably, becomes dirty and often viscosity of the fuel at the engine. contaminated in service. It should Failure to do this can result in poor be purified constantly at sea. combustion and even damage. Water must not be added when centrifuging. Note (1): Remember, viscosity in itself is not a measure of the quality of a fuel. (3) The oil should be heated to about 90°C at the centrifuge. Check with Note (2): Fuel oils having a high density supplier. in combination with low viscosity have low ignition quality. This can mean poor (4) Try and use only about 20 per cent combustion and “diesel knock”. of the rated flow capacity of the separator. Ignition quality can be calculated in terms of calculated carbon aromaticity (5) Check that the correct gravity disc index (CCAI). Typically, while not an is in use at the purifier. exact tool for judging ignition quality, engines running at constant speed (6) Take samples for analysis about Fuel oil samples taken and sealed on and load (over 50 per cent) can without every 1,000 operating hours, to board. difficulty use fuels with CCAI 870 ensure safe engine operation. The (maximum). Engines running at variable sample (minimum 1 litre) should be sample for analysis. Meanwhile, clean speed and load can without difficulty taken with the engine in operation, out sump tank, filters, etc., renew use fuels with CCAI 860 (maximum). after the oil filter on the engine. charge. Provide the following details with WHAT CAN BE DONE the sample – name of vessel, date, SHORT STORY (1) If an independent analysis installation, engine number, oil One of the world’s largest marine diesel recommends that a fuel should brand, engine operating hours, engines burnt untested fuel containing not be burnt, do not do it! Place hours oil has been in use, where “cat fines” (catalytic aluminium/silicon the supplier on notice, seek advice taken, type of fuel oil, other fines). In a few hours of operation, from your P&I Club and consider a remarks. several years wear and tear occurred in port of refuge. the new engine. An independent few (7) If the water content of an oil charge hundred dollar test would have avoided (2) Excess water can be settled out exceeds 0.5 per cent to 1 per this expensive claim. with time and heat. Purify slowly. cent, and can not be removed by Check to see if contamination is purification in service, change the SUMMARY saline – do not use the fuel if it is. complete charge and renovate. If Based on experience it can be said problems are experienced, tell the that excessive wear and tear, damage (3) If a fuel has a poor compatibility analyst as various types of analysis and salvage of vessels with broken rating, do not mix with any other are available. down engines often relate back to fuel. basic problems with fuel oil and lube oil (8) In general, changes in the analyses quality. (4) If “diesel knock” (high CCAI) provide a better idea of the occurs, ensure that engine and fuel condition and trends in the oil than What is so amazing is that having fuel temperatures are maintained. Do the absolute values. oil independently analysed costs a not advance ignition timing. few hundred dollars. Suppliers often (9) Send or ask the oil supplier to analyse lube oil free of charge. The (5) If problems occur, samples should send copies of the analyses to the amazement is that many owners still, on be taken at various points in the engine maker for comment. the threshold of the year 2000, do not fuel system, e.g., transfer pump, do this! setting and service tanks, before/ If the lube oil in an engine is suspect, after purifier. It is also useful to take pump contents up to an empty storage sludge or deposit samples at the tank. Allow to settle – drain – take purifier, filter, scavenge spaces and piston rings/crowns. Note: some of the current problems with fuels are: – “cat fines” – abrasive – waste automotive lube oil – abrasive – bacteria in MDO and gas oil – corrosive, etc.

LUBRICATING OIL Many of the points discussed above regarding purifiers, filters, test cocks on Taking a lube oil sample at the purifier. storage tanks apply to lubricating oil. In addition, there are several key points to consider. (1) Ensure that the correct grade of oil is being used.

Loss Prevention Circular Bunker Quality No. 03-01, May 2001

Introduction component used for blending Circular 04-01, Charterers Liabilities and The securing of bunkers of an Intermediate Fuel Oil (IFO) for Bunkers). acceptable quality depends on a variety ships. The result is fuels with higher of factors such as availability, demand, density, carbon residue, sulphur If the vessel is in the unfortunate area, choice of suppliers etc. The etc. Practically every parameter has situation of having received a high problems have, to a certain degree, increased significantly throughout Catfines fuel, and has to use the fuel, fluctuated with the bunker prices. The the refinery processing. Ships owners should be prepared for a market has seen fuels contaminated fitted with older centrifuges are succession of replacements of plungers, with waste chemicals detrimental to the unable to effectively treat such nozzles and other moveable engine health of the crew as well as damaging fuels, particularly the “high density” parts. A normal full set of spares may to the ships engines. For many years, it products, i.e. fuel densities of 990 not be sufficient to see the problem has been normal in certain areas of the Kg/m3 and above. Centrifuge through. The fuel testing service world to dispose of used automotive manufacturers offered upgrade kits provider should also be contacted, lubricants in bunkers, thus possibly for the “old” separators, but few together with your centrifuge adding to engine operating problems. operators invested in these kits. manufacturer and fuel supplier for advice and decision-making. High-density fuels which far exceed 3 Poor ignition quality is another Separators must be in prime conditions. the capabilities of the onboard fuel problem that has arisen recently. Considerations should be given to treatment plants are being delivered The standard laboratory tests do replacing separators manufactured to vessels.. Water in the fuels is not not test the ignition quality, and it prior to 1984/1985. uncommon, resulting in emulsified is not a part of the ISO 8217 Fuel fuels and fuels that cannot be treated in Standards. The problem is normally If the vessel has been on extended shipboard fuel treatment plants. Some associated with low viscosity/high lay-up, Catfines and other impurities of the problems mentioned result in density fuels. If a vessel receives may settle in the bunker tanks if a damages that are insured against, but this type of fuel, the ship should sufficient amount of bunkers remain in most cases the associated costs fall keep temperatures as high as onboard during the lay-up period. below the deductible. Occasionally, possible, thus avoiding low load When subsequently re-commissioned, blending contaminated fuel with good operation. Gard has seen a number these Catfines and impurities are likely quality fuel may solve the problem. of claims in the last few years where to be stirred up in heavy seas and cause In other instances, the damages in the the vessel has had to be assisted damage to the engine(s). Therefore, form of wear and tear of moving parts to an emergency port. The use of consideration should be given to are so great that the vessel has to divert inferior ignition quality fuels may the cleaning of bunker tanks prior to to an emergency port for major repairs. well result in major repairs to the bringing a vessel out of an extended vessel’s engine(s). lay-up to prevent the occurrence of this Primary problems type of problem. We see mainly three problems: Recommendations 1 Catfines, aluminium and silicon Owners should be aware that the The settling of Catfines is a continuous resulting from the refinery cracking increased demand from shore side process taking place onboard every processes, are very abrasive to ship’s industries for premium products has seagoing vessel. As a rule, fuel tanks machinery, unless properly removed. resulted in a deterioration of IFO used should be cleaned regularly. Settling The end result can be machinery in marine engines. Compounding and daily service tanks should be damage unless the Catfines are the problem is the demand from cleaned at least once a year. This messy, removed to an acceptable level shipowners for high performance but important task would save ship (contact your engine manufacturer) lighter engines. operators a lot of problems. through effective fuel treatment onboard, i.e. optimum use of IFO used as bunkers should, as a For further information on bunker the centrifuges. The mode of minimum, meet the requirements of the quality, testing and other relevant centrifuge operation must be specifications set out in ISO 8217, latest information, can be found on websites discussed with the manufacturer as issue. Bunker testing agencies such as such as www.bunkersworld.com, www. the type and year of manufacture of DnV Petroleum Services (DnVPS) and dnvps.com, and www.lrfobas.com and the separators is of significance. Lloyd’s Register’s FOBAS are set up to www.fueltech.no. monitor that this is the case. 2 As the global demand for premium Gard would like to thank and products such as gasoline, jet If the vessel has performance difficulties acknowledge Mr. Kjell Haugland’s fuel, heating oils and gas oils and poor ignition quality is suspected assistance in preparing this circular. has increased sharply, the use of despite a satisfactory CCAI value, a refinery conversion processing have further test for the ignition quality markedly influenced the quality should be performed. Fueltech, of the end product, the residual FOBAS and DnVPS can perform these component which is the major services (see Gard Loss Prevention

Gard News 165, February/April 2002 Some technical aspects of marine fuels testing By Kjell Haugland, Marine Fuels Consultant, Oslo

Introduction suitable samplers. Prior to placing the to accept joint sampling by buyer and Ships use the cheapest liquid fuels order, it is his responsibility to agree seller, despite the obvious fact that this available on the market, hence the fuel on a joint sampling procedure with the is only fair and square. The practice quality varies greatly. The safe operation supplier, including where and when of multiple sampling by both parties of ships depends on knowledge of the the sampling shall be carried out. If the makes dispute resolution difficult, and is quality of the fuel used. vessel does not have a fuel sampler always costly and time-consuming to all acceptable to the supplier, the buyer is involved. The sophisticated buyer, who Fuel Testing not likely to be in a position to stipulate sees the benefit of fuel quality control, It is estimated that only one third of all sampling at the point of custody should always insist on joint sampling at marine fuels delivered to ships trading transfer, i.e., at the ship’s fuel manifold. the point of custody transfer. If declined internationally is tested. Even so, the by the supplier, then he should make a experience from the testing services Proper sampling during a bunker reference to this in the ship’s logbook. indicates that things are far from transfer operation is extremely perfect. The comparison of a car filling important, because continuous drip Testing services provide their customers up with fuel at a petrol station with a sampling at the point of custody with sound and practical advice relating ship lifting bunkers via a barge does not transfer is the only secure way to to bunkering operations. Following apply. And for good reasons, which will ascertain the quality of the product them is good practice. be explained later. received by the buyer. Sampling either before or after the event will not, for It is customary in some ports to request Marine fuels are practically all custom obvious reasons, bear the same weight. the pre-signing of documents relating blended to a buyer or ISO specification. It is good news that Singapore, being to the bunkers being transferred, The supplier may or may not have by far the largest bunkering port in including the signing of labels for detailed information on the quality the world, has decided to introduce the bunkering samples. This is not of the components he is using in the legislation requiring all bunkerings acceptable, as the buyer has no control blend. Satisfactory quality components taking place by barge to be sampled over which sample bottles the labels in themselves may well result in an continuously during the bunkering will be placed on. unsatisfactory blend, unless you know operation at the receiving vessel’s exactly what you are doing, and we all manifold. The bunker barges will all be Sample transport know that blends are made directly to required to fit a defined quality sampler The operator pays good money to the vessel bunkering, either through at the receiving vessel’s end of the the testing service for speedy analysis line blending from shore installations, bunker delivery hose. The new law will results. The chief engineer must blending on board barge, or in-line become effective on 1st January 2002. therefore arrange for a courier company blending from the bunker barge. The to pick up the sample immediately only way to ascertain the quality of the The Marine Environment Pollution after collection. It is advisable to inform product actually received on board is Committee (MEPC) of the IMO the courier company of the sample’s through representative sampling and (International Maritime Organization) whereabouts by e-mail or fax, with copy testing by specialised laboratories.1 has also recently drafted guidelines to the agent and owner/operator. indicating where and how samples It is true that any analysis result is only should be taken in connection This will put pressure on the ship’s as good as the sample analysed. If with the bunkering of ships. The agent and courier, and will enable the the sample is not representative of “Guidelines for the sampling of fuel operator to follow up in order to avoid the average quality of the product oil for determination of compliance delays. transferred from supplier to buyer, with ANNEX VI of Marpol 73/78” state: then the analysis result is of little or “For the purpose of these Guidelines Use of new fuel no value. Therefore, there should a sample of the fuel delivered to ship The ship should avoid using the new be rules and routines on board should be obtained at the receiving fuel until its quality has been confirmed to ensure that every bunkering is ship’s bunker manifold and should be to be satisfactory by the laboratory properly sampled, including fuels for drawn continuously throughout the report. It has been customary to bunker the auxiliary engines. Each and every bunker delivery period”. It is hoped that just prior to leaving port. However, vessel should have fixed routines these guidelines will be adopted by all analysis results on the new bunkers may describing in detail the bunkering the major shipping nations, because not be available until a few days after operation, including the stages they make good sense. leaving port, so some operators have before, during and after bunkering, started to bunker when entering port, and listing the responsibilities of each Even if the bunker industry has whenever possible (draft, cargo, timing, individual involved. It is the owner/ come a long way in its endeavour to etc., permitting). This allows the analysis operator’s responsibility to set up such safeguard the interests of the various results of the new fuel to be available an instruction manual. It is also his parties involved, there are still strong prior to leaving port, which of course is responsibility to provide the ships with objections from some supplier quarters the ideal situation. Should the fuel be

1 See article “Effects of off-spec bunkers” elsewhere in this issue of Gard News.

© Gard AS, January 2014 40 While at sea, a ship having received which it is intended, provided that the report indicating a satisfactory fuel application (the diesel engine/boiler) quality can optimise the fuel treatment, is in normal good condition. However, knowing the precise values of important fuel specification can not safeguard fuel parameters, such as density every aspect of satisfactory fuel quality, (selection of the correct gravity disc for otherwise it would be far too detailed the purifier), the viscosity (adjustment of to be of practical use. And remember, temperature), water content (checking we live in a competitive world. It is of water content in the fuel after naturally in the supplier’s interest to treatment in order to decide on the use deliver a product which just meets the of an emulsion breaker additive) and requirements of the specification at the so on. highest possible price. Independent, third party testing is therefore very However, if the analysis report important, a must for safe and effective indicates an unsatisfactory fuel, the ship operation on today’s fuels. fuel testing service will also provide recommendations on how to optimise Know the limitations of your fuel its treatment and use, if necessary. treatment plant unfit for use, then the operator will be Through communication with all parties The only way to effectively treat marine able to take appropriate action while involved, including supplier, testing fuels on board is to use centrifuges. But the ship is in port, which will be a lot service, perhaps also class and/or even centrifuges can not remove 100 cheaper for all involved. insurer, sound decisions can be made per cent of all the sludge and particles based on facts. The problem may be detrimental to engine components. A number of operators give clear related to the separation of a high- Centrifuge manufacturers may claim instructions to their ships not to use density fuel. The advice could then be that some 70 to 80 per cent of catfine new, untested fuel until the analysis to modify the purifier into a clarifier, by particles will be removed when their report is at hand, indicating satisfactory installing the smallest gravity disc of machines are operated optimally. fuel quality. These ships carry larger the set, thus converting the separator Documented reports, however, show reserves of the “old” and tested fuel, into a clarifier, frequent shooting of that during manufacturer-controlled or may even change to the more costly the clarifier bowl, possibly operating tests at their factory, the removal of MDO or gasoil. Such measures may be two clarifiers in parallel, depending on catfines was just over the 50 per cent considered as extra insurance, naturally other fuel parameters such as water, mark. But even if one accepts a figure at a cost. However, avoiding delays sediments or catalytic fines (al+si). of 70 per cent removal of particles and and/or engine damage will enhance the Provided you know exactly the quality sludge, it still leaves 30 per cent of the ship operator’s reputation in the market, of the fuel received on board, the particles and sludge in the treated fuel and influence the premium paid for operator will be in a position to make entering the vessel’s daily service tanks. insurance.2 the right decision. Is it customary to re-centrifuge the fuel Having said that, as ships frequently Now imagine a vessel also having in the service tank? Some vessels have a may have to set sail prior to receiving received inferior quality bunkers, but fuel piping arrangement to enable this the fuel analysis report, operators will without any sample sent for testing. She to be done. Still, not all carry out this be well advised to provide fuel test will carry on until engine damage of very important operation regularly. kits for their vessels, thus enabling some sort occurs, resulting in delay and their chief engineers to verify the fuel’s extra cost, usually far exceeding the Are bunker fuel tanks cleaned from density, viscosity and water content, cost of regularly using a testing service. time to time? The answer is only very plus the nature of the water, whether occasionally. Tank cleaning may be on fresh or salty. The issue of seaworthiness Marine Fuels Specifications the list of items to be carried out during is likely to arise if a vessel leaves port The operator who realises that docking, but it is frequently the item with fuel having a density higher than the quality of marine fuels varies that is dropped either due to cost or the ship’s fuel separators are designed considerably, being “the bottom of the time, or both. Settling and daily service to handle, a viscosity too high for the barrel”, the “leftovers” at the refineries, tanks (or at least the daily service heat available on board, or a density/ a “low priority product” in the eyes tank) should be cleaned annually. Just viscosity relation indicating that the of the manufacturer, accepts that fuel imagine what happens to the sludge fuel may be deficient in ignition quality quality control is required for safe ship and particles accumulated in the (CCAI), since this could result in ignition operation. He realises that even though tank bottom when the ship runs into delay, severely hampering the ability of “highly priced”, marine fuel is priced stormy weather! This is almost certainly the main engine to provide propulsion. way below the crude oil from which it is the time when excessive engine A too high water content speaks for derived. components wear occurs. itself, particularly if it is sea water. Marine fuels are in the main produced How effective is the fuel treatment While fortunately most fuels delivered to company specifications, which are plant on your ships? Most operators are of satisfactory quality, every normally stricter than or at least equal probably have no idea. The centrifuges operator knows from experience that to ISO specifications. are spinning, the fuel is separated at mistakes are made and problem fuels the throughput matching the engine are supplied. Such products will be The purpose of fuel specification is consumption, the fuel temperature and discovered at an early stage through to stipulate a product quality which, flow are kept as constant as the fuel proper sampling and professional when meeting the requirements of treatment plant auxiliary components analysis of representative samples. the specification, should perform will allow. The fuel quality is known satisfactorily in the application for through testing, and hopefully the

2 See article “Effects of off-spec bunkers” elsewhere in this issue of Gard News.

© Gard AS, January 2014 41 correct gravity disc has been installed in the purifier. The chief engineer, having done his best to optimise the fuel treatment, will have little or no idea as to the quality of the fuel entering the ship’s engines. He can not see what is going on in the treatment plant and is not supposed to taste, smell or even touch the product. In fact, he has to cross his fingers and hope that satisfactory quality fuel is entering his power units.

In practice it is very simple and easy to ascertain the effectiveness of the treatment plant through sampling and testing. Some sophisticated operators do this in a planned way, and they have an experience factor at hand as to which quality product they can treat satisfactorily. The day such operators receive an off-specification fuel, they will know whether or not their vessel can handle the product in question and whether to arrange an off-lift operation. This does not mean that the buyer must accept off-specification products will be able to avoid a costly deviation a “Fuel System Check” programme to without having compensation from and off-lift operation. At least one of their customers. They are well advised the supplier. However, in many cases it the fuel testing services recommends to make use of it.

Loss Prevention Circular Effects of off-spec No. 08-01, November 2001 bunkers

Introduction equipment. Power was temporarily However, the bunker brokers advised Taking onboard off-spec bunkers restored at 2217 hrs. A second the company that the samples had can cause significant disruption to a blackout occurred at 2218 hrs resulting not been taken at the bunker barge as vessel’s ability to trade. In addition, it in the vessel not being under control. required by the Singapore Standard creates problems in recovering from Although power was finally restored at CP60:1996. Further samples were the insurers costs incurred due to a 2220 hrs, the vessel was only able to drawn at the barge’s manifold and lack of and/or limitation in cover. This continue at half speed. sealed with a barge seal. circular is intended to provide an example of the problem as experienced The Chief Engineer observed that Damage to machinery by shipowners. The case described the bunker which had been supplied The damage to the main engine as below relates to a passenger ship, but in Singapore that day, had a high a result of using the off-spec bunker applies equally to all types of vessels. degree of carbon residue, clogging was abrasive wear marks on all fuel Loss Prevention Circular No. 08-01 the complete fuel system in the main nozzles, abrasive wear on all fuel pump is the next instalment in a series of and auxiliary engines. The Master barrel/plunger assemblies as well as circulars produced by Gard dealing with informed the owners of the problem heavy fouling of all turbochargers. The damages associated with bunkers and and the decision was made to return to turbocharger impellers were noted to bunkering1 and outlines problems which Singapore due to safety considerations. be heavily fouled, the labyrinth seals on may arise when passenger ships have to the gas sides were choked with carbon deal with off-spec bunkers. At 1100 hrs the following day, fuel deposits, and the bearing bushes were samples were taken in the settling and worn. In addition, the boiler burner Passenger ship operations are very service tanks where the bunkers had unit was also heavily fouled. Upon sensitive to operational disruptions. been loaded and the vessel began review of the engine logbooks, there Costs of disruption can occur in the discharging the off-spec bunkers at was no evidence of any problems with form of hull and machinery damages, 1200 hrs. A representative from the the engines prior to taking on the off- damages and compensation to Singapore Maritime Port Authority spec bunker. The running hours of the passengers and crew as well as damage informed the vessel at 1230 hours that main and auxiliary engines were noted to reputation that may influence future they were being cautioned due to the to be well within acceptable limits for bookings and earnings. Compensation emission of black smoke – apparently overhauls. to customers beyond the initial costs the result of the burning of the off-spec due to commercial considerations can bunkers. An engine repair contractor In this case, there was no indication easily fall outside the scope of cover of boarded the vessel at 1600 hrs and that the vessel had received the results hull and machinery, loss of hire and P&I upon surveying the situation, indicated from the first fuel test prior to sailing. cover. that repairs would take at least two In addition, the vessel had apparently days provided no extensive damage a very limited amount of bunkers Course of events was found. After consultations with the onboard prior to loading the first off- Upon arrival in Singapore, the vessel owners, the Master decided to abort spec bunkers. Therefore, the vessel had was firmly secured to the pier at 0550 the cruise. to commence using the new bunkers hrs. At 0800 hrs, a bunker barge prior to receiving the test results. In this came alongside to deliver bunkers to At 0630 hrs the following day, the circumstance, the vessel was not able the vessel. The barge commenced debunkering operation was completed. to create a ‘buffer’ by using the existing bunkering at 0810 hrs and completed Another bunker barge began loading bunkers while awaiting the test results. the operation at 1255 hrs. The bunker a fresh supply of IFO 180 cst at 0810 Had this been the case, the company delivery statement noted that 90 metric hrs and the operation was concluded may have been able to discharge tonnes of supposedly IFO 180 cst was at 0945 hrs. All passengers were the off-spec bunkers and taken on supplied. Fuel samples were taken for discharged from the vessel at 0945 replacement bunkers. testing by a credible bunker quality hrs. A second agency was used for the testing company. However, the results sampling of the second bunkers taken What types of damages are actually from this bunker test would not be and a different bunker testing company covered? In this type of case, available for another 2 – 3 days. was used to analyse the second shipowners can find themselves in a bunkers. The results of the tests of the situation where insurance cover can The vessel departed Singapore for first and second bunkers indicated high only pay a portion of the costs incurred. Thailand at approximately 1745 hrs on ash, water and total sediment potential For example, in this instance the cost of that same day. At 2215 hrs that evening, (TSP) content. In addition, high sodium repairs to the damage to the machinery the vessel experienced a total blackout, to water content was also reported, was below the deductible. For loss including the loss of all navigational indicating the presence of seawater in of hire, the vessel was off hire but the bunkers. within the off hire deductible. The P&I

1. Gard Loss Prevention circulars related to bunkers are: Loss Prevention circular 01-00 (Main Engine Damage Due to Ignition Delay), Loss Prevention circular 03-01 (Bunker Quality), and Loss Prevention circular 04-01 (Charterer’s Liabilities and Bunkers). These circulars can be found on the Gard website at www.gard.no.

© Gard AS, January 2014 43 entry covered the Member’s “liability apply to all types of ships. However, the significant damage to the vessel to pay damages or compensation passenger ship industry can be more and its ability to trade. In the case to passengers onboard the Ship in sensitive than most industries. outlined above, the costs were consequence of a casualty” as per Rule considerable and were only partially 28(b) of Gard P&I Club’s Statutes and Fuel testing recoverable from insurers. Rules. As stated in the Gard Handbook 1. Bunkering procedures, including on P&I Insurance2: “‘compensation’ fuel-testing procedures, should Taking on bunkers relates only to the Member’s legal be reviewed to ensure correct 2. Every precaution should be taken liability to the passengers and cannot procedures when dealing with off- to ensure that adequate bunker include any claim by the Member spec bunkers. The crew involved supplies are available to allow for in respect of payments made to should also be properly briefed on the proper testing before use of passengers to protect the Member’s these procedures to avoid costly any new bunkers taken on. It is commercial reputation.” P&I cover and time-consuming interruptions. imperative that passenger ships, as thus, does not include additional In the Det Norske Veritas Annual well as other vessels on tight charter compensation to passengers above the Report 2000, it is stated that only 40 schedules, are able to deal with Member’s legal liability made to foster per cent of the world fleet performs situations where it is necessary to customer goodwill. fuel testing.3 This lack of testing can use bunkers without the test results lead to extensive damage to the being available. This may involve The shipowners is therefore left to bear vessel’s machinery which is costly complex contingency planning a significant cost for business disruption both to the owner and insurer alike. in order to properly evaluate in these types of instances, where and ensure that a ‘buffer’ exists. only limited insurance cover would be On the other hand, there are For example, some shipowners available under hull and machinery, loss cases where there is a company maintain a quantity of marine diesel of hire and P&I. Dependent upon the fuel testing procedure but due oil (MDO) onboard for situations circumstances, demurrage may also to commercial or other reasons where off-spec bunkers need to be need to be charged and thus creating the results of the tests are neither discharged and only limited IFO is problem for the shipowner. received in time nor actions taken available. to adjust the fuel equipment and Lessons learned engines accordingly. The improper The lessons learned from this case use of off-spec fuel can cause

2. Gard Handbook on P&I Insurance by Simon Poland and Tony Rooth. Published by Assuranceforeningen Gard. Arendal, Norway 1996. The preface of this handbook can also be found on the Gard website at www.gard.no. 3. Det Norske Veritas Annual Report 2000 can be accessed via their website at www.dnv.com.

Loss Prevention Circular Main Engine Damage No. 01-00, July 2000 Due to Ignition Delay

Ship Type: Panamax bulk carrier Extent of the Damage of the quality of the fuel received on (built 1980) The result was a complete breakdown board. There is however little value Course of Events of all pistons, cylinder liners and in companies spending money on In a Gulf of Mexico port, the vessel cylinder heads with related parts. Due sampling and testing if shipboard received heavy fuel oil IFO 180 to lack of availability of spare parts engineers are not properly trained to according to ISO category RME 25 onboard ship, only preliminary repairs understand the fuel quality analysis with a density of 989,6 kg/m3 and a were made. Thus, the voyage to the and provided with procedures and viscosity of 172 Cst. The bunker receipt discharge port was made at reduced instructions on how to adjust the fuel information and the following DNVPS speed. Meanwhile, the company had equipment and engines accordingly. analysis coincide with respect to these to make arrangements at the discharge parameters. port to acquire spare parts and make Procedures and instructions should preparation for final repairs. The vessel be established in the technical or operational departments on how to: Based on the density and viscosity was taken off-hire upon arrival at the - establish requirements for fuel quality information, the ignition qualities of discharge port. depending on the fuel treatment this fuel (CCAI) were calculated to 860 equipment and engines on board which is acceptable for slow speed As a result the total cost to repair is - follow-up the vessels’ bunkering engines. The vessel is equipped with a approximately $530,000 USD and the schedules, ensure correct sampling and 16-cylinder medium speed main engine total time off-hire is approximately 45 where to send samples for analysis of European design, and this fuel is on days. - ensure the engineers on board and the limit of where operational problems technical staff ashore will understand could be expected for medium speed Probable Cause the analysis and the limitations for their engines. As a result, the chief engineer The ship manager and/or commercial equipment, and on board and the ship management operator of the vessel made the error in - in the event of having taken on office were informed by DNVPS that believing that a lower viscosity fuel (180 fuel of inadequate quality, establish precautions should be taken to ensure Cst) was of better quality than a high communication with the engine makers satisfactory combustion. viscosity fuel (380 Cst). This is commonly seen when a fuel supplier lowers the and fuel analysing company in order viscosity by adding lighter components to provide proper instructions to the The chief engineer on board and the vessel. ship manager ashore did not pay that may seriously alter the ignition any attention to the fuel analysis. characteristics. They did not considered the specific recommendations issued by the engine The ship manager had arranged for maker or DNVPS’s precautions for sampling and analysis of fuel. However, operating the main engine with fuel the ship manager had not ensured that with inferior ignition characteristics. their chief engineers were provided To compound the problem, the vessel with proper procedures and instructions was sent to areas for trading including to take the necessary precautions days with river passage with variable against damages that could be incurred loads on the main engine. This made by inferior quality fuel. it difficult to maintain maximum combustion temperature and thus The result was that the vessel left the made it virtually impossible to follow bunkering port with no preventive the operational recommendations. actions and precautions on how to deal with a situation with a fuel on board The delayed combustion resulted with inferior combustion characteristics. in increased combustion pressure, combustion close to the cylinder walls Lessons to be Learned and the consequential failure of the The importance of fuel sampling and lubrication of the pistons and liners. analysis is essential for verification

Gard News 174, The interplay of fuel and May/July 2004 lubricating oil quality on the reliability of diesel engines

There is a basic relationship between machinery policies, of which 73 per problems by extensively testing engine reliability and quality of fuel oil cent are main and auxiliary engine- different types of lubricating oils during and lubricating oil. related claims. This means that main shop trials. and auxiliary engine-related claims Introduction constitute approximately 31 per cent of It is generally agreed that the fuel Hand in hand with new secondary Gard Marine’s total hull and machinery oil, which is the third element in this refinery processes, which have claims. interplay, has the most influence developed during the last decades, and the biggest variation in terms of new engine problems have emerged. The above figures should be compared quality and properties. The continuous It is, unfortunately, a proven fact of life with indications from the industry that development of refinery processes that the end users often have to “pay” 80 per cent of all engine breakdowns during the last decade has resulted for technological advances, until all the are related to problems with either the in changes in the characteristics of links in the chain have adapted to the fuel or the lubricating oil. both distillates and heavy fuel oils. new parameters. Increased demands with respect to Trilateral interplay environmental issues have also resulted The significance of fuel oil quality In any particular engine installation the in changes, in particular for the lighter in relation to the condition of an choice of lubricating oil must not only distillates. Possibly, a high quality engine is obvious. But this will always satisfy the requirements of the engine grade of lubricating oil may prevent have to be considered taking into design, condition and load, but also the negative effects of unwanted fuel account the complex system of the requirements put forward by the quality oil properties and secure satisfactory main parameters, such as engine/ of the fuel oil. This may be described engine performance. Even with a high turbocharger specifications, load by a trilateral interplay involving the quality grade lubricating oil, the risk parameters (high/low), environment, lubricating oil, the fuel oil and the of experiencing problems with low- filters, purifying systems, quality of the engine. quality fuel oils is high, particularly lubricating oil and the qualifications in combination with certain load of the operating engineer. It is not Trouble-free engine management conditions. the intention to expand on all the requires each of these three elements aforementioned aspects in this article, to have both design and quality within The interplay involving fuel oil, but mainly to highlight the basic certain limits. Exceeding these limits lubricating oil and the engine can be relation between engine reliability and may lead to reduced service intervals illustrated as in the below table. quality of fuel oil/lubricating oil. or, in the worst case, serious engine damage. The areas of concern mentioned in the Statistics illustration above may (hopefully) not Gard Marine’s statistics show that Lubricating oils can vary both in quality materialise very often, but, if they do, machinery-related claims constitute 42 and characteristics, but most engine they will cause serious problems. Very per cent of all claims under hull and manufacturers attempt to avoid these often these problems may be traced

Overview of hull and machinery claims Overview of machinery claims divided by divided by number of claims (1998-2002) number of claims (1998-2002)

Thruster 7% Collision Other 2% Propeller/ Machinery 14% Rudder 5% 42% Other 15%

Grounding Auxiliary 15% engine Main 25% Heavy engine w eather 48% Contact Fire 3% 4% damage 20%

© Gard AS, January 2014 46 directly back to unwanted fuel oil fuel oil is the receipt of off-spec emphasised. The incidents described in characteristics, but in some cases they bunkers. Although this article does the following article in this issue of Gard are due to inappropriate adjustment of not deal specifically with this issue, News highlight the benefits of good the properties of the lubricating oil to the areas of concern mentioned sampling and analysis routines. the characteristics of the fuel oil. above are also applicable to off-spec bunkers problems. The importance Off-spec bunkers of proper fuel oil sampling and A major concern related to marine analysis procedures can not be over-

Fuel Oil – Engine – Lubricating Oil Areas of concern

Fuel oil: Lubricating oil: Stability Sludge Sulphur Separation Particles/Cat. fines Oxidation Fouling Additive Ignition Concentration Combustion Thermal degrading Concentration

Engine – Problems: Cylinder wear Piston ring groove deposits Cylinder liner polishing Piston crown deposits Gas leakage Crankcase deposits Fuel oil leakage to the crankcase

Gard News 165, February/April 2002 Bunker spills

Every vessel needs bunkers. Some are to come out of the hole, and five litres monitored an operation from the run by fuel oil, others by gas oil, and reached the sea. The costs paid by shoreside, or that shoreside monitoring some need both for their machinery. Gard reached USD 3,000, in addition was sloppy, and that the speed was In addition, vessels need lubricating to what the member had to pay under excessive compared to what had oils and hydraulic oils. The oils are the agreed deductible. How could been agreed. How can that be proved normally taken on from barges or shore this have been avoided? First of all, afterwards? Is there evidence that the connections through hoses. Hydraulic were the scuppers plugged? No. So, vessel had told shore personnel to slow oils or lubricating oils may be taken on whose fault is this? Is there a routine on down? It has to be remembered that in drums. the vessel for plugging the scuppers it is the spiller who is the responsible when bunkering? Somebody must be person and who shall have to pay in the Seamen know these things. They know responsible for that job and it should first place. Under OPA 90 the spiller can how to plan the bunkering operation, be set out in the safety programme. It only avoid responsibility if he can show, how to follow the routines set out in the is essential that the responsibility for by a preponderance of evidence, that vessel’s safety programme. They know doing a job be allocated to a specific somebody else, not being at all related how to calculate their need for bunkers individual – not in order to be able to to him, was the sole cause of the oil and how to order. They know how to blame somebody when something discharge. hook up the bunker barge and how to goes wrong, but in order to make sure connect the hoses to their manifolds. that the job gets done. Could the None of the cases mentioned above And they know how to monitor the “blurp” have been avoided? A “blurp” involved criminal investigation of the bunkering operations. is most often caused by an air pocket responsible crewmember or company. being trapped between the beams However, nowadays it is quite likely And yet, bunkering spills do happen. underneath the tanktop depending that the Coast Guard will look closely Over the last 20 months, 350 pollution on the trim of the vessel. It is essential into the vessel’s routines and safety incidents have been registered in the that the person in charge is aware of programmes whenever a spill occurs. Gard system. Many of these cases what trim the vessel has, and what If they find that something is not in (165) have been reported merely can happen in certain circumstances. accordance with rules and regulations, for precautionary reasons and are Hence, it is better to stop the operation e.g., MARPOL 73/78, the FBI may be not expected to cost anything. Of one or two centimetres short and informed about the case and start the remaining cases, the majority is avoid the very expensive oil being a criminal investigation. This means expected to cost Gard between USD lost overboard. [5litres = USD 3,000; that criminal lawyers may have to 100 and USD 100,000 each. There are i.e., 1 ton = about USD 750,000]. be appointed to defend the master, also a few cases expected to cost more Another way of trying to avoid the oil chief engineer and others, and, if than USD 100,000 each, of which three slipping overboard is of course to have non-compliance is grave enough, the are expected to cost more than USD absorbent material ready near to every shipowning or operating company. 1 million. The most expensive will cost opening from which oil could possibly At this stage Gard and its local somewhere around USD 25 million. escape – not only by the manifold. correspondents have to step aside because of the attorney/client privilege It is true that not all of these incidents Another vessel was bunkering in aspect. involve bunker spills. However, the Texas. In order to be able to follow the majority of the 165 no-cost cases operation a manhole had been taken Japan involve minor spills during bunkering off. Despite such a precaution, the A vessel was transferring oil internally operations – spills so miniscule that tank was filled faster than expected into the settling tank. Unfortunately the they would not, some years ago, have and 1,000 litres were reported to have tank overflowed and some oil found its been reported to Gard at all. It is also reached the surrounding waters. The way into the sea through the airpipe. true that the majority of the remaining product was heavy fuel oil, and the Whenever there is a pollution incident cases relates to bunker spills one way vessel’s response plan under OPA 90 in Japan the Maritime Police will start or the other and this article will analyse was activated. Everything went well in investigating to find the culprit of the some of these events to provide a the end, but the operation, including mishap. Such investigation may take picture of what happens, and how a QI (Qualified Individual), OSM (Oil Spill some hours, but it may also take days, mishap is treated in different countries Manager), oil spill response company, and in the meantime the vessel is not around the globe. US Coast Guard, etc., cost USD 180,000. allowed to leave the port. After having How could this have been avoided? interrogated the chief engineer and United States Obviously, by closer monitoring of the other engineers it was found that the The vessel was bunkering in Oregon. It operation. The person responsible second engineer was the wrongdoer. appeared that the engineer in charge for the operation should not be The investigation took two days, of the operation had unscrewed an distracted by having to do other things which meant that the operators of the ullage pipe cover to be able to check simultaneously. liner vessel involved, being on a tight the quantity in the particular tank. schedule, had all sorts of problems with Unfortunately, as often happens, a What about the bunkering speed? their customers. Criminal proceedings “blurp” forced a small quantity of oil Quite often it is said that nobody started and bail of USD 10,000 had to

© Gard AS, January 2014 48 be put up for the second engineer, with any oil or oily mixture irrespective of manifold valve on the other side of the a promise that he should come back to whether there is fault, and the state of vessel is closed, he feels that somebody Japan for trial at a later date. If he does mind of the offender is irrelevant. Only else should be responsible for those not show up when called upon to do so, certain limited defences are available. things so he does not bother. Rather the bail will be cashed in favour of the than showing interest in doing a good Japanese authorities. These are some of the penalties under job, he feels that the master or the chief the PPSA: engineer does not appreciate what he The spill in this case was miniscule. – for discharge of any oil or oily does anyway, so why bother? In other cases clean-up costs will be mixture from a ship, a fine of between added to the bail costs. SGD 1,000 and SGD 1 million, or There are so many excuses for behaving imprisonment not exceeding two years, carelessly. Not all of them can be Ukraine or both; mentioned here. But what can be done Heavy fuel oil had leaked into the – for failure to report any actual or to try and avoid mishaps caused by tunnel of a vessel, and the tunnel was probable discharge of any oil or oily sloppy behaviour? Should one have the emptied overboard in Ukrainian waters. mixture, a fine not exceeding SGD careless individual replaced? Is there An unspecified quantity of oil escaped. 5,000; any guarantee that the replacement The system in Ukraine is to impose – for failure to properly maintain oil will not behave in the same way after a fine and any clean-up costs on the record books, fines ranging between a while? There appears to be no easy vessel. A table is used to assess the SGD 5,000 and SGD 10,000, or answer to these questions. But it seems amount of the fine. In this case, since imprisonment not exceeding 12 that companies that have closer ties to the quantity discharged was unknown, months, or both. their crew members, that offer them USD 3.1 million had to be paid. the option to come back to the same While imprisonment for an offence vessel or other company vessels after a Of course, the original reason for under the PPSA is rare, in a recent vacation period, have less mishaps than this mishap was a structural fault case involving a VLCC, the master companies that do not. But people are allowing the oil to enter the tunnel. was sentenced to three months different and what is But who decided to empty the tunnel imprisonment and fined SGD 400,000 good for one may not be good for overboard? Could that have been done for the discharge of oil and oily another. Still, making the crew member otherwise? mixtures from the ship. On another feel he is part of the company in which charge of failing to properly maintain he serves can only have a positive Singapore the oil record book, the master was effect. After having touched the dock, a hole imprisoned for 10 months. appeared in a bunker tank of a vessel. The cover Approximately 27 MT escaped into the Imprisonment is not covered by The cover provided is set out in Rule sea. The cost of clean-up reached USD the P&I Club. Neither is a fine for 38.1 of Assuranceforeningen Gard’s 465,000. having contravened Marpol or other 2001 Statutes and Rules: regulations or for having committed a “Rule 38 Pollution Another case involved a fractured criminal act. 1.The Association shall cover: ballast line passing through a bunker a.liabilities, costs and expenses tank. In this case the quantity of oil Turkey (excluding fines) arising in consequence was unspecified but the mishap was During bunkering, an unspecified of the discharge or escape from the detected and stopped quite rapidly. quantity of heavy fuel oil escaped Ship of oil or any other substance or the The cost of clean-up reached USD through a manifold valve which had not threat of such discharge or escape.” 33,000. been checked. A fine for USD 45,000, based on the size of the vessel, was It should be noted that the rule covers Singapore is quite effective when imposed. pollution caused both by oil and other it comes to combating spills. A lot substances. Hence, it is a very wide of money has been put into their One wonders how it is possible to cover. The cover responds equally contingency plans and there is plenty forget to check that other manifold where oil is spilt during bunkering or of equipment which can be used in valves are closed. However, this case is a chemical cargo overflows from the the area. Still, with all the islands and one of many involving just such a cause tank during loading. It should also be the sea currents in the Straits, clean-up of pollution. Are routines and safety noted that the substance must have operations of some magnitude do not programmes unsatisfactory, or are the been discharged or have escaped from come cheap. In addition, the Prevention individuals in charge reckless? the ship. This means that the cost of of Pollution of the Sea Act (PPSA) cleaning up the vessel’s deck after an imposes criminal liability for, amongst The human element overflow is not recoverable. other things, the following: The reader will have noted that in the – discharge of any oil or oily mixture cases mentioned above the human The rule says that “liabilities, costs and from any ship into Singapore waters; element has been of relevance. It is a expenses” are covered. Liabilities in this – failure to report any actual or fact that very often the human element context mean legal liabilities. probable discharge of any oil or oily is the cause of mishaps. So what is this mixture into Singapore waters; and “human element”? It usually seems Fines are not covered under Rule – failure to properly maintain oil record to consist of the individual who does 38.1, but under Rule 47, which will be books on board a ship. not do what he should under certain considered later. circumstances. Rather than checking It should be noted that the Singapore the ullage of the tank he goes aft to To give a picture of actual liabilities High Court has held that the prohibition have a cigarette. Rather than checking which are covered under Rule 38.1, let on discharge of oil and oily mixtures the safety programme he feels he is so us examine a specific section of OPA from ships is a strict liability offence. In experienced he knows how to handle 90: other words, the offence is committed this operation. Rather than making sure “Sec 1002. Elements of Liability the moment there is a discharge of that the scuppers are plugged or the (a) In General: (…) each responsible

© Gard AS, January 2014 49 party for a vessel (…) from which oil have the same attitude, although not, to be totally insane to be criminally is discharged, (…) is liable for the perhaps, to the same extent as the US. charged because, for instance, some oil removal costs and damages specified gets in the water after an incident, many in subsection (b) that result from such The second Rule of particular interest in countries today do have legislation incident. respect of pollution is Rule 47.1.c: under which the individual will be (b) Covered Removal Costs and “Rule 47 Fines charged. The US and Singapore are Damages 1.The Association shall cover fines examples mentioned before. Fines (or (1) Removal Costs – The removal costs or other penalties imposed upon a imprisonment) in such cases are not referred to in subsection (a) are Member (or imposed upon a third party covered under the Rule set out above. (A) all removal costs incurred by the whom the Member is legally obliged United States, a State, or an Indian to reimburse or whom the Member Conclusions Tribe (…), and reimburses with the agreement of the – Use your brain when you are in (B) any removal costs incurred by any Association) by any court, tribunal charge of or part of a bunkering person for acts taken by the person or other authority of competent operation. which are consistent with the National jurisdiction for or in respect of any of Contingency Plan. (…)” the following: – Know what you are doing. (…) c. the accidental escape or Removal costs are costs incurred in discharge of oil or any other substance – Check valves once more, even if it is removing the oil from the sea or land, or threat thereof, provided that the not your responsibility. marsh areas, soiled boats, beaches, Member is insured for pollution liability docks, and so on. They include the cost by the Association under Rule 38, and – Check that scuppers and absorbent of boats and people, safety equipment subject to the applicable limit of liability material are in place. for people and other equipment, under the P&I entry in respect of oil storage and hauling of waste to a dump pollution risk.” – Make sure that there is good yard or place for incineration, including communication with the bunker the cost of getting a permit as a waste It should be noted that not only supplier. generator to haul the waste to the site fines imposed upon the member as of destruction or storage. shipowner are covered under this – Make sure the bunker supplier is “(…) (2) Damages – The damages rule. If the member is legally obliged going to deliver the quantity you referred to in subsection (a) are the to reimburse a crewmember, for ordered. following: instance, for a fine imposed on that (A) Natural Resources – Damages for person, it may also be covered. Where – Remember that a fine may cost you injury to, destruction of, loss of, or loss the member is not legally liable to dearly. of use of, natural resources, including reimburse the fine, but wishes to do so the reasonable costs of assessing the for other reasons, he could still apply – Remember that your family may not damage, which shall be recoverable by for cover. It is then up to the discretion be able to visit you in prison. a United States trustee, a State trustee, of the Club whether to provide cover an Indian tribe trustee, or a foreign or not. trustee.” It should also be noted that for a fine to This paragraph is of vital importance be covered under Rule 47 there must whenever there is a spill of some have been an accidental escape. Rule significance in the US. It should be 38 mentions nothing about the escape noted that those who can formulate having to be accidental. So it could a claim under this paragraph are the happen that even though the Club federal or state authorities, or Indian would cover clean-up and other costs tribes. It should also be noted that related to a spill, cover would not be “reasonable” costs of assessing the provided for a fine if the escape had damage are recoverable. Unfortunately, not been accidental. From a practical it does not say who should decide on point of view, the provision in Rule 47 is what are “reasonable” costs. there in order to exclude fines where a deliberate action from those on board Natural resources in this context are has caused a pollution incident. It does for instance birds, sea otters and fish. not matter whether the fine is imposed One of the intricate points from the upon the vessel or any of the crew Club’s perspective is the “loss of use responsible for the deliberate action. of” aspect. In one case some years This means that a fine imposed because ago the shipowner was found liable of a deliberate and unauthorised to the trustees for approximately USD pumping of bunkers or bilge water 12million because people were not overboard would not be covered. On allowed to visit a beach for about the other hand, a fine imposed upon 2 weeks while clean-up was being the vessel or a crewmember due to an undertaken there. accidental over-bunkering would be covered. There are further elements of liability described in the OPA 90, but these Civil fines do not create problems are beyond the scope of this article. for the cover provided the above However, the US is not the only country requirements are fulfilled. Criminal imposing strict liability on an offender. fines, however, do create problems. Singapore is mentioned above, but Although it might seem from a most countries with interest in shipping shipowner’s or a seaman’s perspective

Loss Prevention Circular Charterer’s Liabilities No. 04-01, May 2001 and Bunkers

Introduction agency stated that the amount of water It was determined that both the IFO Neither shipowner nor charterer likes in the IFO was likely to be difficult to and MDO bunkers contained non- receiving poor quality bunkers. This remove. hydrocarbon additives typical for can lead to a number of problems for motor vehicles lubricants. These shipowners and charterers. These A dispute arose between the owners additives may negatively influence problems include: and the providers of the bunkers. It is ship’s machinery (see the Gard Loss – damages to main or auxiliary common practice that the fuel supplier Prevention Circular 03-01, Bunker engines; attends the bunker sampling procedure. Quality). Their use may lead to – finding terminals willing to receive In this case, the request to witness increased wear rates of machinery by de-bunkered fuel; the sampling had been signed by the inhibiting the separators that remove – co-ordinating and bearing the costs supplier prior to commencement of the abrasive particles and water from the associated with diverting the vessel bunkering. The validity of the samples bunker fuel and contribute to fouling for off spec bunker discharge; drawn by the ship was questioned in the exhaust spaces, turbocharger – coordinating and bearing the costs since neither the fuel supplier nor blades and nozzle rings. In addition, it of providing new bunkers to the other unbiased personnel observed was explicitly stated in the charterparty vessel; the sampling procedure and handling. agreement that no spent lubricants – reducing speed to accommodate The supplier contested that the were to be found in bunker fuel used the use of off spec bunkers; and or contamination of the bunkers occurred onboard the ship. – Co-ordinating and bearing the cost after being loaded onboard the vessel. of lost time, i.e. off-hire. The vessel informed the owner and The vessel secured a continuous drip charterer of the results of the analysis. These problems can lead to disputes sample using the flange sampler The owner then requested that between ship owners and charterers. fitted at the ships bunker manifold. immediate action be taken to discharge Therefore, it is important for both The bunker supplier took the bunker the off spec bunkers. On the same shipowners and charterers to protect samples at the point where the bunker day that the sample evaluation was themselves in the event of disputes. hose was connected to the shore received, it was arranged for additional The objective of this circular to present bunker installation. The supplier samples to be taken by a survey case study examples of these types refused to make arrangements to agency appointed by the charterer. of incidents, how disputes can arise, arrange for the discharge of the inferior The surveyor took various samples of and provide some guidance as to how bunkers contending that it was the the IFO and MDO. Analyses of the shipowners and charterers can protect vessel’s fault for the contaminated three samples showed that for one their interests. bunker. They contended that other sample, blending with another fuel vessels had bunkered soon before had occurred and hence less spent Case 1: Fresh water contamination and after ship A and had no water lubricants in the mixture. The MDO was Upon arrival in port, ship A had a contamination problems. The vessel needed to run the auxiliary engines and remaining 24.8 MTs of bunker fuel in was required to retain and use the the donkey boiler. Results from the two the settling tank and requested that bunkers and eventually discharge the other samples showed no drop in the an additional 150 MTs of intermediate remaining unsuitable fuel during a elements that indicated the presence of fuel oil (IFO) be stemmed. The bunkers scheduled dry-docking some months the automotive lubricants. However, it were loaded into an empty bunker later. The off spec bunkers added was the view of the charterer’s surveyor tank. Since there were little remaining additional deadfreight to the vessel, that the bunkers were not as bad as the bunkers onboard prior to loading the thus reducing the amount of cargo that owner had suggested. new bunkers, the Master and Chief could be carried. Engineer agreed that the new bunkers The charterer then arranged that the should be used. When the separators Case 2: Motor lube oil original shipboard sample be sent to were started, it was noticed that large contamination a second bunker-testing agency for quantities of sludge and water were Ship B took on IFO and marine diesel analysis. The results of that test showed clogging sludge discharge passage. A oil (MDO) bunkers and the bunker- that the IFO and MDO conformed separate sludge line was then fitted to testing agency received the bunker to the requirements of ISO 8217 as collect the sludge in drums so as not to samples 5 days after the operation. The required by the chartering agreement, overload the vessels sludge tank. bunkers were placed into 7 different but contained spent automotive tanks. The sampling procedure was in lubricants. It was determined that approximately accordance with the vessel’s bunkering 15% of the separators throughput was procedure. Two days later the bunker- The charterer contended that none sludge. It was believed that the IFO did testing agency informed the vessel of of the surveyors or the bunker-testing not have the proper time to settle due the results of the sample analysis. The agency ever requested for the bunker to the short time period between the specifications stated in the charterparty to be removed. In addition, some of stemming and purifying the bunkers. required that the bunkers be in the presumed off spec bunkers had This created the large quantities of accordance with ISO 8217. already been mixed with other bunkers emulsified sludge. The bunker-testing onboard by that time. However, the

© Gard AS, January 2014 51 owner the MDO that was used resulted fuel testing services such as DNV reason new and previous fuels in the black out of the auxiliary engines. Petroleum Services (DNVPS) or have to be mixed, avoid equal Lloyds Register (FOBAS). Ensure proportions. This includes ensuring In addition, the filters needed cleaning that proper wording in the that records of all fuel transfers twice a day whereas this procedure charterparty form is included to are properly documented in the normally done only once a week. ensure that bunkers are ordered vessel’s logbook. If problems are against the appropriate fuel experienced, secure samples from Eventually, it was decided that the ship specifications. the tanks involved and describe the would use the IFO after ensuring that problems. all procedures were implemented to 2. Procedures are in place and optimise the fuel treatment onboard. implemented onboard the ship 5. The vessel should notify the owner However, the auxiliary machinery was to test the bunkers for density, immediately if they are experiencing sensitive to traces of catfines (e.g. viscosity and water, using a simple problems with an off spec fuel. This aluminium and silicon) that were found test kit. A suitable sampler should enabling the operator to register in the fuel. The charterer made all be used drawing a continuos drip a complaint against the supplier. arrangements to discharge the off spec sample at the vessels fuel manifold The vessel must also receive clear MDO and replace it with MDO without during the entire bunkering instructions from the operator as any traces of spent lubricants and operation. to the handling of the product in catalytic fines. question, including that of de- 3. The Master should ensure that all bunkering. Recommendations relevant parties including the fuel Similar cases as those described supplier’s representative witness For further information on bunker above are common in our industry, the sampling procedures. If the quality, testing and other relevant and we suggest that the following supplier refuses to witness the information, you can visit such websites recommendations be considered by sampling procedure, preparation, as www.bunkersworld.com, www.dnvps. both the owners and charterers to signing and sealing, the Master com, and/or www.lrfobas.com and www. protect their interests: should document their refusal in fueltech.no. 1. Both owners and charterers should order to protect the interests of ensure that standard agreements both the owner and the charterer. Gard would like to thank and are in place with regard to ensuring acknowledge Mr. Kjell Haugland for is that the quality of bunker fuel 4. All efforts should be made by assistance in preparing this circular. meets recognised quality standards. the ship’s crew to segregate new That is, make use of responsible and old bunkers. If for some

Gard News 154, P&I incident – How June/August 1999 not to do it – Bunker operations

A Member’s vessel – a bulk carrier – and the slick spread, contaminating The above incident demonstrates how recently had a spill of bunker oil in a the walls of four berths. A number of simple deficiencies and a small amount dock area and clean up costs alone barges and other vessels in the vicinity of oil spilled can have significant amounted to around USD 130,000. of these berths were also contaminated. consequences. Before any bunkering The vessel was conducting an internal The vessel’s discharge operations were operation, including the internal transfer of heavy fuel oil from a deep temporarily suspended. transfer of oil, procedures must be tank to a settling tank and as a result followed to ensure that any potential the bunker line became pressurised. Clean up was made difficult and deficiencies are rectified before it is too Whilst ordinarily this might not have protracted because heavy fuel oil is late. On this occasion the importance been a problem, the deck manifold for persistent in nature, meaning that it of blanking off manifold connections the bunker line had not been closed. naturally dissipates slowly. not in use and plugging the scuppers Consequently fuel escaped onto the became regrettably obvious. starboard side of the deck and via the Claims from stevedores and barge scuppers into the dock. owners for idle time, as a result of the spill and clean up, are currently being It was estimated that a quantity of 5 to reviewed. The Master is also to be 10 MT of oil found its way overboard fined.

Gard News 165, February/April 2002 Stone cold bonkers – FD&D bunker disputes

The phrase “stone cold bonkers” (stone form), albeit that the charterers also question, may assist in avoiding in coal bunkers), which was used to referred to a clause dealing with a problems or, at least, if problems do describe a chief engineer’s demeanour on vessel’s description where the fuel was occur, in identifying which party bears discovering large lumps of flint amongst described as “IF 180 CST”. The vessel, the risk involved. Of course, if there is what was supposed to be best Welsh after taking fuel on board, sustained an express stipulation with regard to the anthracite, suggests that the problems problems with the fuel injection bunkers then that must be complied concerning bunkers, if not just fuel equipment, which led to damage to with. oil, coincide with the introduction of both cylinder liners and piston crowns, mechanical propulsion on vessels. which necessitated a deviation for Quantity of bunkers repairs. The charterers argued that their Disputes in respect of the quantity Whilst the problems associated with obligation was confined to supplying of bunkers delivered poor quality bunkers have given rise to fuel with a designation “IF 180 CST”, It will come as no surprise to anyone a number of serious disputes between given that that was the sole criteria to hear the complaint from a vessel the respective parties involved in bunker contained within the charterparty. The owner alleging that he has been operations (owners, charterers, physical owners, on the other hand, referred charged for bunkers in excess of what suppliers and brokers), it has been noted to the passage in Wilford on Time 3 he, purportedly, received. Whilst by a London solicitor that the potential Charters at page 138, namely: tanks that are large and of a regular for a major casualty is enormous where “The bunkers supplied by the charterers shape pose few difficulties insofar as such casualty arises out of the provision of must be of reasonable general quality, ascertaining quantities, tanks which substandard bunker fuel. suitable for the type of engines fitted to are of an irregular shape pose much the particular ship.” greater problems. Any dispute will The question of bunkers has provided largely depend upon the evidence a considerable number of disputes for The tribunal found in favour of the available (this comment applies equally members and clients over the years. owners. It is perhaps of note that for disputes in respect of quality). If The following disputes appear most the tribunal seemed to have placed operational circumstances permit, the frequently: considerable reliance upon the fact that bunkers can be loaded into previously – Disputes in respect of bunker quality. it was the charterers who had control empty tanks, then it will be easier, – Disputes in respect of bunker quantity of the bunker supply operation, in from an evidential standpoint, to (quantity actually stemmed and quantities that they contracted with the supplier, convince a judge/tribunal that the upon re-delivery). controlled where the vessels bunkered, position is correct. Further, well kept – Disputes in respect of damage done to at what price were the bunkers and how records and contemporary documents bunkers whilst aboard the vessel. much was to be bunkered. are of paramount importance. Lastly,

4 as disputes of this nature arise Bunker Quality Finally, the authors of Bunkers opine as between the owner/charterer and the The solicitor referred to above also follows on page 109: bunker supplier, it should be noted mentioned that he could not recall the “(…) there appears to be a growing that the contracting party with the last time he had seen a decent bunker consensus that, even without a bunker bunker supplier may have to act with clause in a charterparty and, by and large, quality clause/fuel specification in considerable speed, as it is a feature that comment holds true. In Nippon the charterparty, charterers are under of many bunker supply contracts that Yusen Kaisha v. Alltrans Group of Canada an absolute obligation to provide 1 should claims not be presented, or Limited, the court was asked to consider bunkers which are reasonably fit for proceedings commenced, within a whether Clause 2 of the NYPE form (1946 the vessel’s engines. If the engines are reasonably short period of time, then edition) imposed a strict liability on the non-standard in any respect, thereby the purchaser waives all its rights charterers with respect to the quality and requiring non-standard bunkers, then it against the bunker supplier; this is, by fitness of the fuel supplied to the vessel, is of course for the owners to so advise and large, to be contrasted with the or, in the alternative, the charterers were charterers whose obligation, otherwise, position between owner and charterer. merely under a duty to use due diligence is simply to provide bunkers which in ensuring that there were proper would be reasonably fit for the standard bunkers. The court held that the duty on engine of the type in question.” Disputes in respect of bunkers the charterers was an absolute one. upon re-delivery The point being made reinforces the There are usually two types of dispute In a subsequent London arbitration2 a comment referred to at the beginning in respect of bunkers upon re-delivery, tribunal was asked, again, to deal with of this section: a properly drafted but there is one common denominator: this issue (namely Clause 2 of the NYPE clause, applicable to the vessel in the volatility of bunker prices. The

1 1984, unreported. 2 Lloyd’s Maritime Law Newsletter 1/88. 3 Time Charters by Wilford, Coghlin & Kimball, 2nd Ed, 1982. 4 Bunkers by Fisher & Lux, 2nd Ed, 1994.

© Gard AS, January 2014 53 first scenario concerns the case where become the owners of the fuel following arbitration.7 There was an the vessel is to be re-delivered with on board the vessel at the time of allegation that the bunkers supplied “about” the same quantities of bunkers delivery, with the owners taking over to the vessel were contaminated. as on delivery and, additionally, where the property in the bunkers upon re- The owners relied upon analysis of the bunker price has been stipulated in delivery. Accordingly, whilst the vessel samples they had taken from the ship’s the charterparty. Obviously, it is difficult is on charter the owners are bailees manifold. The arbitrators held that to determine when, precisely, a vessel of the bunkers on board and they are, the vessel’s samples had been taken will be re-delivered and, accordingly, accordingly, under an obligation to care in the normal and correct manner by common sense dictates that some for the bunkers. In one incident cargo means of continuous drip mechanism. allowance must be made. The question gained access to the bunker tanks Conversely, no samples had been taken is, therefore, how much of an allowance. due to a failure of a sounding pipe on the barge itself. The award then The answer will be a matter of fact that ran through the cargo hold. The goes on to state as follows: and will depend upon factors such as ensuing contamination of the bunkers “Had they [the samples] been taken, the daily consumption expected, the in the adjacent double bottom tank properly witnessed and acknowledged, quantities stipulated in the charterparty caused considerable damage to the analysis of them would have been of and the characteristics of a particular vessel’s main engines and, further, the considerable weight. As it was, some vessel. An accurate determination of owners were obliged to compensate ‘samples’ were handed to the Chief the quantity of fuel used, together with the charterers for the bunkers on board Engineer, who had been persuaded historical records (daily tank soundings, which had become unusable by reason to sign for them but there was no daily flow meter readings, records of of the contamination.6 evidence (our emphasis) as to where, bunker receipts and records in respect how and when those ‘samples’ were of sludge and settled water spring to Evidence taken.” mind), will assist in resolving any dispute With the exception of some disputes in that arises. respect of quality, where considerable The tribunal found in the owners’ technical expertise may be required, favour, and whilst it may well be that The second scenario is where the the majority of these disputes do not others will not follow it, that tribunal’s charterparty is silent on the question involve “rocket science”; the disputes methodology is reasonably clear, in of re-delivery bunkers but the price are, however, to quote our London that the absence of evidence placed of those bunkers is pre-determined. solicitor, “very expensive claims to the charterers at a considerable The charterers stem bunkers to take run”. From a legal standpoint, a good disadvantage, notwithstanding a advantage of this contractually agreed case without good evidence simply significant number of arguments put price by bunkering the vessel to full becomes a bad case. Good on board forward by them. capacity just prior to re-delivery. The practice is only good on board practice courts, both at first instance and in if there are records to place before the the Court of Appeal,5 held that the appropriate tribunal. The provenance of charterers had no power to order the samples of the fuel alleged to have fuel that was “in no way required for caused the problems must be clear. charterparty purposes”. Further, of course, the link between the fuel in question and the damage has Damage to the bunkers whilst on also to be proven. Usually the latter is board the vessel easier to establish than the former. It is generally accepted that under all time charterparties the charterers A good example on the question of evidence can be gleaned from the

5 THE CAPTAIN DIAMANTIS (1997)1 Lloyd’s Rep. 362 and (1978)1 Lloyd’s Rep. 346. 6 Liability for said damage falls under the P&I cover – see Rule 39 of Assuranceforeningen Gard’s 2001 Statutes and Rules. 7 London Arbitration 8/98.

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