Gard : Bunkers and Bunkering
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A selection of articles previously Bunkers and published by Gard AS Bunkering 2 © Gard AS, January 2014 3 Contents 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. © Gard AS, January 2014 4 Introduction 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 AS, January 2014 5 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