INDEPENDENT INTELLIGENCE FOR THE GLOBAL BUNKER INDUSTRY

www.bunkerspot.com Volume 7 Number 3 June / July 2010

Inside: • Emissions Trading • High Seas Bunkering • Risk Management • Maritime Week Americas • People and Places • News and Events

A DAY IN THE LIFE OF... The Barge Captain and his Crew Contents

NEWS Bunker Overview 6 Europe 10 Asia Pacific 16 Head Office: Petrospot Limited Americas 20 Petrospot House Somerville Court Africa and Mideast 22 Trinity Way Adderbury Oxfordshire OX17 3SN ENVIRONMENTAL ISSUES England Tel: +44 1295 81 44 55 Lesley Bankes-Hughes assesses the reactions of the shipping industry to the prospect of Fax: +44 1295 81 44 66 a regional or global maritime emissions trading scheme 24 Email: [email protected] Website: www.bunkerspot.com Gijsbert de Jong of Bureau Veritas reviews progress on the use of alternative fuels for marine propulsion 30 Director - Publishing / Editor Ian Taylor Tel: +44 1295 81 44 55 HIGH SEAS BUNKERING Mob: +44 7876 70 45 41 Per Funch-Nielsen looks at how high seas bunkering is fuelling performance Email: [email protected] improvements and reducing costs 32 Managing Director / Publisher Llewellyn Bankes-Hughes Tel: +44 1295 81 44 55 BUNKERSPOT WORLD MAP Mob: +44 7768 57 44 30 Global prices and news at a glance 34 Email: [email protected] Associate Editor BUNKER PEOPLE Lesley Bankes-Hughes Tel: +44 1295 81 44 55 Captain ‘Pete’ Kysar of Buffalo Marine Service Inc. gives a unique insight into the Mob: +44 7815 57 86 43 daily life of a bunker tanker captain 36 Email: [email protected] Nick Browne of GAC lifts the veil on the world of the bunker credit manager 40 Advertising Sales Executive Steve Simpson Kerry Bennett of Shell gives an insight into the hectic daily schedule of a bunker Tel: +44 1295 81 44 55 procurement team 42 Mob: +44 7800 75 52 78 Email: [email protected] TECHNICAL ISSUES Director - Events Luci Llewellyn-Jones Michael Green of Lintec Testing Services looks at the proposed revision of the ISO Tel: +44 1295 81 44 55 8217 fuel quality standard from a fuel purchaser’s perspective 44 Mobile: +44 7775 92 42 24 Email: [email protected] Ricardo plc tells Bunkerspot about its plans to develop next-generation low carbon marine energy systems 48 Events Executive Sinead Harvey Martin Lucas of Kittiwake argues that variable fuel quality is compromising the health Tel: +44 1295 81 44 55 of marine engines 50 Email: [email protected] Capt. Vassilis Papadopoulos of Macoil gives an overview of some of the fuel quality Design & Marketing Manager Alison Jane Cutler issues that shipowners must consider in the current market 52 Tel: +44 1295 81 44 55 Email: [email protected] MARKET OUTLOOK Design & Marketing Executive Stefka Ilieva of Poten & Partners, Inc., looks at future supply and demand prospects for Simon Demaine Tel: +44 1295 81 44 55 the fuel oil market 56 Email: [email protected] Sales Manager RISK MANAGEMENT Luke Hallam Evans Chris Thorpe of HCEnergy considers how proposed US legislation for financial Tel: +44 1295 81 44 55 derivatives could affect fuel hedging 58 Mob: +44 7815 86 73 52 Email: [email protected] BUNKER TERMINALLING Events Sales Executive Osei Mitchell Adrian Tolson of Chemoil argues that terminalling provides a sound footing amid the Tel: +44 1295 81 44 55 volatility of the bunker market 61 Mob: +44 7789 20 20 10 Email: [email protected] EVENTS Events & Subscriptions Sales Executive Elena Melis Llewellyn Bankes-Hughes looks back at the recent Maritime Week Americas conference 63 Tel: +44 1295 81 44 55 Events and training course diary 64 Mob: +44 7975 89 52 03 Email: [email protected] NETWORKING Asia Representative Sarah Morris Bunker people on the move 66 Email: [email protected] Accounts Helen Wilkins Bunkerspot is an integrated news and intelligence service for the international bunker industry. The bi-monthly magazine and 24/7 electronic news Tel: +44 1295 81 44 55 service, www.bunkerspot.com, both provide highly-specific information on all aspects of the marine fuels industry. Bunkerspot Magazine (published Email: [email protected] in February, April, June, August, October and December) annual subscription rate, including unlimited access to the website www.bunkerspot.com, is UK£250/€280/US$400. ISSN 1741-6981. Copyright Petrospot Limited © 2010. All rights reserved. Published by Petrospot Limited, a dynamic independent publishing, training and events organisation, focused on providing information resources for the transportation, energy and maritime industries.

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bunkerspot June / July 2010 www.bunkerspot.com 3 Bunker Overview

12 month rolling price charts

380 CST Fuel Oil

600 Houston 380

Singapore 380

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Rotterdam 380

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Singapore MDO 700 Fujairah MDO

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Crude oil prices hit a 10-month low in late May are significantly higher than they were this than bunker prices). and, although there was a slight bounce-back, time last year and it is highly unlikely that we And how have the bunker suppliers fared many in the market seemed to think that the will be revisiting the lows of 2008/2009 while commercially over the past few months? combination of swollen US oil inventories and China’s demand for energy products remains One of the biggest independent suppliers, continuing concerns about the health of the voracious and the beginnings of economic Chemoil, posted a Q1 net loss of $13.5 world economy would probably preclude any recovery are in place. million (see page 16). The company said major rebounds. Even though Rotterdam’s 380 cst price that its results were ‘negatively impacted by Bunker prices were also on the slide. In indications dropped a bit over the course of certain one-time charges including a loss from Rotterdam, for example, the delivered price May, they are still soaring above the $300 a the disposal of a delivery vessel and the full of 380 centistoke (cst) fuel oil dropped from tonne levels that we saw at the start of May realisation of employee stock option costs’. a high of almost $480 a tonne at the end of last year. However, Chemoil conceded that it had April to under $420 a tonne over the course of A recovery in the world shipping markets suffered from ‘weak demand’ in some of its May. The other benchmark ports – Singapore, would, of course, help to nudge up bunker markets and it had therefore ‘taken action to Fujairah and Houston – also saw prices drop, prices – and there are signs that some improve profitability and operating efficiencies but at a gentler gradient. companies, at least, have turned the corner. while implementing measures to reduce As is often the case, the trend in marine A.P. Moller-Maersk reported a net profit of costs’. distillates was harder to read. The price of $639 million in the first quarter (Q1) of 2010, World Fuel Services (WFS) reported a marine diesel oil (MDO) in Rotterdam slipped compared with a loss of $373 million for the Q1 gross profit of more than $39 million for the down by around $90 a tonne over the course first three months of 2009 (see page 14). marine segment of its business – which was of May. But there was very little movement The shipping giant said that the improvement a healthy return, even though it was down by in Houston, and distillate prices in Fujairah in its fortunes was mainly due to increasing more than 15% on Q1 2009. actually gained a few dollars. freight rates and higher oil prices (which was Meanwhile, Aegean Marine Petroleum It’s worth noting that oil prices generally presumably a reference to cargo values, rather Network Inc. (AMPNI) saw an impressive

6 www.bunkerspot.com June / July 2010 bunkerspot Bunker Overview

130% jump in its Q1 bunker sales reviews – up Apr-10 May-10 from $361 million in Q1 2009 to almost $840 380 IFO 29-02 05-09 12-16 19-23 26-30 03-07 10-14 17-21 million (see page 14). The increase in bunker prices over the Rotterdam d 450 460 468 470 477 470 456 421 financial period played a big part in boosting Gibraltar d 462 463 486 484 497 486 468 441 AMPNI’s revenue total – but AMPNI also Piraeus d 465 466 483 486 496 485 469 435 managed to push up its sales volumes by Suez d 501 501 508 500 506 511 504 503 nearly a third, from around 1,310,000 metric Fujairah d 466 472 479 484 497 488 480 453 tonnes (mt) to more than 1,720,000 mt. Durban w n/a n/a n/a n/a n/a n/a n/a n/a This was perhaps to be expected, given the manner in which the company has expanded Tokyo d 510 515 519 528 541 555 533 520 its coverage and beefed up its fleet of bunker Busan d 489 501 508 506 520 540 519 497 tankers over the past year. Hong Kong d 470 483 493 492 496 500 487 461 For most bunker players – shipowners Singapore d 460 474 483 483 491 484 476 443 and suppliers, alike – the steady roll-out of Los Angeles w 474 476 473 476 483 479 472 458 environmental regulations will continue to be Houston w 451 463 467 463 475 475 457 433 a key issue. New York w 469 482 480 483 497 490 472 434 As the imposition of a North American Emission Control Area (ECA) looms nearer, Panama w 474 488 488 490 496 497 478 460 a recent survey by DNV Petroleum Services Santos d 459 475 480 482 489 490 481 442 (DNVPS) suggests that there is still some Buenos Aires d 462 479 489 481 502 525 525 525 ironing-out to be done on the manner in which the existing European Union (EU) ECA is run. Among the 65 shipping companies that Apr-10 May-10 replied to the DNVPS survey, 40% believed 180 IFO 29-02 05-09 12-16 19-23 26-30 03-07 10-14 17-21 that EU member states were not harmonised Rotterdam d 468 476 487 487 495 488 474 440 in the application of regulatory standards when Gibraltar d 480 487 506 501 514 502 484 460 verifying compliance with the 0.1% limit. On a more positive note, apparently 90% said that Piraeus d 485 489 505 508 514 508 491 456 their crews were familiar with onboard routines Suez d 512 516 529 523 544 545 523 513 for complying with EU fuel regulations. Fujairah d 478 485 491 499 509 503 492 464 For shipowners who find ECA compliance Durban w 513 511 511 507 507 506 491 477 too confusing, the bad news is that this is only the start. The foundations are being laid – albeit Tokyo d 518 521 528 535 549 564 539 526 very slowly – for a maritime emissions trading Busan d 503 519 522 519 532 551 530 505 scheme (ETS). As Lesley Bankes-Hughes Hong Kong d 480 494 502 500 508 510 496 468 points out on page 24, the details of how an Singapore d 470 485 494 493 503 494 488 453 ETS might develop and who would police it Los Angeles w 491 494 493 497 505 504 495 481 remain sketchy, and neither the Copenhagen Houston w 463 472 479 474 487 486 468 449 Climate Change Conference nor the recent New York w 482 492 493 497 510 503 486 454 International Maritime Organization’s (IMO) MEPC 60 seemed to have done much to drive Panama w 488 509 509 516 524 524 506 489 the development forward. Nevertheless, it Santos d 478 494 499 500 507 508 499 460 is possible that, within a few years, bunker Buenos Aires d 489 499 506 516 522 540 548 558 buyers will not only have to juggle their take- up of low and high sulphur fuels, but they will also have to be tracking and trading their Apr-10 May-10 ‘carbon credits’. And if there’s any time left, MDO 29-02 05-09 12-16 19-23 26-30 03-07 10-14 17-21 they’ll also have to make sure that their ships Rotterdam d 651 715 717 705 729 730 676 640 have enough fuel to get from A to B. Gibraltar d 680 722 741 741 760 746 719 691 Piraeus d 687 721 723 687 734 730 691 649

Suez d 880 827 822 827 831 803 817 810 Fujairah d 683 700 702 710 722 744 730 737 Durban w 698 712 729 723 739 737 717 696

Tokyo d 685 697 723 711 738 729 731 728 Busan d 685 712 724 718 736 745 728 736 Hong Kong d 671 716 727 718 726 723 699 663 GLANDER Singapore d 666 711 713 703 718 712 687 632 Los Angeles w 721 755 744 746 753 758 741 719 Bunkerspot prices are compiled from the Houston w 660 671 681 681 687 699 682 672 reports of the four brokers whose market New York w 677 687 693 690 707 703 700 672 reports have consistently proved the most Panama w 700 719 736 739 753 756 691 743 reliable and accurate: Cockett Marine Oil Santos d 744 779 784 764 762 766 758 716 Limited, LQM, Glander International Inc., Buenos Aires d 723 743 748 764 786 788 797 801 and KPI Bridge Oil. Bunkerspot welcomes market reports from other sources for inclusion on its website www.bunkerspot.com KEY: d – delivered • w – ex-wharf • n/a – not available • mdo – marine diesel oil

8 www.bunkerspot.com June / July 2010 bunkerspot Environmental Issues Trading places

he Copenhagen Climate Lesley Bankes-Hughes Change Conference failed quite ‘With a virtual impasse assesses the reactions of Tmagnificently to resolve the issue on CBDR, how can of setting targets for the reduction of the shipping industry to greenhouse gas (GHG) emissions for the momentum be sustained maritime industry. Given that there was in future discussions the prospect of a regional no consensus on this point, then it goes without saying that that any progress about GHG emissions or global maritime on debating a mechanism for achieving reduction for the global targets was equally underwhelming. emissions trading scheme MEPC 60 has also come and gone shipping industry?’ without producing any significant conclusions about the means of achieving emission cuts. about the means of implementing an as yet An ‘expert’ working group continues to undecided reduction strategy? At a meeting ponder the pros and cons of using market- in London with IMO Secretary General based instruments (MBIs) to reduce GHG Efthimios Mitropoulos in May, the European output, although, according to industry Commissioner for Climate Action, Connie observers, significant work was achieved on Hedegaard, reiterated her desire for a global the Energy Efficiency Design Index (EEDI) solution to the GHG problem, but the at the meeting. However, national sensitivities current political deadlock has also created a surrounding the treatment of developed groundswell of opinion which is in support and developing (Annex 1) countries in the of taking action against emissions on a formulation of a credible and internationally regional basis. acceptable formula for cutting carbon The European Commission (EC)

dioxide (CO2) emissions in the shipping is notably proactive on this issue, and has sector were expressed quite forcibly at this openly stated that, while a global answer is MEPC session. a preferred option, it will press ahead with The concept of common but a European scheme if the IMO does not differentiated responsibilities (CBDR) is one table a solution by 2011. The EC has already of the seemingly intractable ‘deal breakers’ done a considerable amount of groundwork in United Nations’ (UN) discussions. This in looking at individual GHG emissions principle calls on developed countries to limit reduction strategies, particularly the use emissions, whereas Annex 1 countries are not of an emissions trading scheme (‘cap and required to. The International Maritime trade’). Interestingly, while discussions at the Organization (IMO) asserts that the global UN might be mired in political obfuscation, shipping industry should be seen as a level several shipping organisations are also trying playing field where the emissions of a ship are to move the debate forwards and have also the key issue rather than the flag it sails under. declared their support for an emissions Indeed, flagging is often used as a tool of trading scheme (ETS), albeit on a global political and commercial expediency, where basis. However, other organisations, while owners in developed industries frequently espousing the cause of GHG reduction, are flag their vessels in developing nations. adamant that shipping and an ETS would be Although politicians and shipping groups an unworkable marriage. appear outwardly confident that the problem If market-based instruments are to be of CBDR can be resolved, the fact remains used as part of an emissions reduction strategy, that UN decision makers are consistently it certainly seems that an ETS currently has failing to grasp this thorny political problem. the vote of a good many shipping industry Without agreement on this, it remains difficult participants, while backing for a bunker to see how a globally enforceable mandate on levy, as proposed by Denmark, appears to be cutting maritime GHG emissions can be put ebbing away (although this option apparently on the table for consideration and it makes garnered much support in behind the scenes the discussions about the IMO’s potential discussions at the COP 15 conference). role in the governance of any emissions A broad outline of how an ETS for the reductions regulations, as well as the choice maritime sector might work was given in a of a means of application and enforcement, previous article in Bunkerspot (December somewhat hypothetical. 2009/January 2010), but two recent reports With a virtual impasse on CBDR, by a consortium led by the consultancy CE how can momentum be sustained in future Delft (one commissioned by the EC) have discussions about GHG emissions reduction provided in-depth analysis of the viability for the global shipping industry, and how of an ETS on both a global and a regional can the shipping industry be kept engaged basis, and also in relation to other proposed

24 www.bunkerspot.com June / July 2010 bunkerspot Environmental Issues

solutions such as a bunker levy, the EEDI the verification and reporting of emissions. States according to an agreed (but as yet or Energy Efficiency Operational Indicator The study suggests that the monitoring of unspecified) distribution formula, or could (EEOI). emissions would cost relatively little as fuel use be contributed to climate change mitigation For some, the forum of carbon trading is regularly monitored on vessels. Verification strategies. is a rather brave new world; and to large costs would be linked to the number of The monitoring of fuel consumption extent it is. In 2008, the carbon market had vessels owned by an individual shipowner. by vessels could be done through inventory an estimated worth of $128 billion – a fairly Therefore, there may well be economies of control and/or on board fuel consumption swift rate of growth from a base of almost scale, as the verification authority could use measurement equipment. Interestingly, the zero four years earlier. The EC is adamant the same company information systems for report maintains that such a system ‘would that it will press ahead with its own proposals each ship. The CE Delft report estimates that be different from what it presently used on in 2011 if the IMO hasn’t decided on a global verification costs would be unlike to exceed board ships today’. course of action, and given that the IMO’s $10,000 per ship. One of the main ‘selling points’ of a date for completion of its work plan on In a maritime ETS, it is the setting of the European system promulgated by the EC market-based measures is July 2011, only the cap which will result in emissions reduction is that it could be scaled up to become most hardy of optimists might believe that – put simply, carbon trading is purely a a global system. In this case, the report substantive proposals will indeed be ready for mechanism to ensure that the downward suggests that there should be a Maritime consideration by next year. pressure on emissions is maintained. Emissions Trading Scheme (METS) within Europe is without doubt proactive on the Furthermore, using carbon trading for Europe (perhaps linked to the existing EU subject of carbon trading: a European ETS revenue generation should, in theory, do ETS to allow for inter-trading). This would based on land-based emissions has been up much to encourage active and engaged then allow the creation of an international and running since 2005, and aviation will participation in emission reduction strategies convention which would include Annex 1 become a market player in 2012. While some by the shipping industry. countries (again, there is an assumption that commentators say that it is not the most liquid In the EU’s already operational ETS, the the issue of CBDR will be resolved). of markets, and there is still some reticence cap was based on historical emissions and Clearly, the EC can to some extent over the use of hedging strategies, the fact a politically agreed reduction process. For lead by example: the current EU ETS is is that Europe has a template for carbon the new recruit, aviation, the baseline has the largest emissions trading scheme in the trading, which takes it a long way ahead of been based on average 2004-2006 emissions. world with a cap of over 200 metric tonnes the political posturing and prevarication However, setting a baseline for shipping is (mt) of CO2. An American ETS has yet to within UN meetings. proving to be a rather imprecise science. The emerge from a tortuous legislative process, The CE Delft report commissioned by the EC is proposing a cap on emission rates for and the much anticipated Australian Carbon EC (Technical Support for European Action shipping of 20% below 2005 levels by 2020. Pollution Reduction scheme was shelved at to Reducing Greenhouse Gas Emissions for However, the report points out that statistics the end of April after failing to battle through International Maritime Transport) weighs for ship emissions on journeys to the EU parliamentary opposition. But other regional up the pros and cons of various emissions (208 metric tonnes (mt) in 2006) could have initiatives may emerge at some point, and it is reductions measures that could be employed a margin of error of as much as +/- 20%. difficult to see how individual schemes could within a Europe-only scheme. As well as One way to overcome this problem could be easily integrated, or how one scheme looking at emissions trading as a policy be to establish a monitoring period ahead of could justify its pre-eminence and legitimacy instrument, it also considers an emissions tax the introduction of an ETS. However, the to be adopted as the global standard. with hypothecated revenues; a mandatory report flags up a potential flaw with this Indeed, looking at Europe, already limit on the operational efficiency indicator proposition in that if carbon allowances are there are growing calls for GHG emissions or design index; a baseline and credit system based on the emissions, this could actually reduction to be changed from 20% to 30% based on operational efficiency/design act as incentive for ships to produce more levels by a given date, so how could a cap factors; or voluntary action. emissions during the reporting period. of this severity then become the acceptable In its analysis of a European ETS, the In addition, the need to set a monitoring norm for a global trading scheme in which report suggests that the responsibility for period and then establish a cap and allocate all the other participants are committed to a surrendering allowances should be the allowances could defer the introduction of an 20% reduction? shipowner, while the accounting entity ETS by at least two years. Sources close to EC deliberations suggest should be the ship. With this scenario, the The report indicates that momentum on that the Commission is still mulling over the shipowner would be required to report and this issue can best be achieved by taking a conclusions drawn in the CE Delft report, surrender allowances for each ship owned. political decision on the setting of a cap which and that no decisions have yet been made With any regional ETS, defining a could be based on a combination of emissions about a preferred policy approach or the scheme in terms its geographical scope is a data, what it calls ‘equity considerations’, and timing of the introduction of any emissions task fraught with difficulties. How do you scientific arguments relating to climatisation measures. Similarly, CBDR is not seen as assess emissions within territorial boundaries stabilisation. an insurmountable problem, although any in such a way as to safeguard against evasion? The CE Delft study suggests that elucidation over the practical means of The report suggests that emissions could be auctioning of allowances may be the best achieving an accommodation with Annex assessed from between the last port of call option, although there could be some free 1 countries appears to be curiously absent – outside, and the first port of call within, allocation to give the shipping sector time the issue is constantly tossed back into the Europe. to become familiar with the concept of UN’s court as a ‘political’ difficulty, but if The burden of administrative costs carbon trading. The revenue generated by the shipping industry is to take on the task associated with an ETS are largely related to auctioning could be shared among Member of cutting emissions, it must surely become

26 www.bunkerspot.com June / July 2010 bunkerspot Environmental Issues

more engaged in trying to break the stalemate approach, whereas shipping is an absolutely Aron Frank Sørensen, its Chief Marine on CBDR? global industry’. Technical Officer, outlined the association’s Bill Hemmings of The European Clearly, SEAaT’s standpoint embraces the position on this: ‘BIMCO believes that any Federation for Transport and idea of cap and trade. It is, says Aitken, ‘an form of MBI introduced to shipping must Environment (T&E) takes the view that excellent tool to get us where we want to fulfil the nine IMO principles, must have ‘Why shouldn’t Europe press ahead?’ He be’. no element of commercial tools such as the suggests that Europe may already have a draft He sees an ETS as ‘a facilitator or control Energy Efficiency Operational Indicator directive on a European ETS in place and mechanism to make other things [GHG and that any MBI must resolve the issue of could issue it next year, possibly just before emissions reduction] happen’. To make CBDR and “No more favourable treatment” MEPC 62, when progress on the IMO’s the scheme work, however, there must be conflict.’ investigation into MBIs should be revealed. mandatory fuel oil consumption or CO2 The organisation believes that the IMO He also notes the financial benefits of emissions reporting. This could be achieved is best placed to establish a global regulatory carbon trading; some estimates say it could either indirectly, by calculating carbon instrument for GHG emissions for shipping, be worth $5-$10 billion for the aviation emissions from fuel oil used, or by using but it draws back from going down the path and maritime sectors, or even as much as an in-stack CO2 measurement: ‘If you can’t to an ETS. Such a system, ‘international or $60 billion. No other emissions reduction measure it, you can’t manage it.’ regional…would not be transparent. Even proposition for shipping seems to have such a Aitken also sees carbon trading as a though the ETS model has proved to work in clear financial upside. potentially significant source of revenue regional and national regulation of land-based He makes the point that agreement on generation for bunker suppliers and traders. industries, e.g. to regulate SOx emissions, it some emissions reduction initiatives such ‘There is nothing intellectually different is unlikely to work in shipping, owing to its as the EEDI could be achieved as an annex between fuel oil trading and carbon trading,’ global nature, its mobility and its diversity,’ to the MARPOL Treaty. Such agreement he says. continues Sørensen. could be driven through on a majority vote He believes bunker suppliers should seize ‘An ETS appears too draconian in that and there are sufficient developed countries the commercial opportunities afforded by an it seeks an absolute cap on emissions, with a within the IMO to do this, which would ETS. For example, a bunker supplier could resulting negative impact on world trade.’ very neatly circumvent the CBDR problem. say: ‘If you buy fuel from us, we can offer you BIMCO suggest that the financial burden Clearly, the issue of CBDR continues cheaper carbon credits, because the company of a GHG Compensation Fund on shipping to haunt IMO discussions like the ghost has taken a position in the trading market’. may be far less onerous than other options on of Banquo. At MEPC 60, attempts by the Aitken puts the case for carbon trading offer: ‘One of the proposed ETS models may majority of participants to divorce a discussion bluntly: ‘Do you want to be a revenue collector cost shipping as much as $50 billion annually of MBIs from the political ramifications of [as in the case of a bunker levy] or do you compared to the approximately $10 billion CBDR, led Saudi Arabia to complain of want to be part of a system where there is a the GHG Compensation Fund is estimated ‘the tyranny of the majority trampling a fiscal benefit – do you want to be a passive to cost.’ significant maritime minority’. revenue collector or an entrepreneur?’ Sørensen is emphatic that: ‘BIMCO Several shipping organisations have He believes that the IMO should be the strongly believes that the shipping industry already staked their colours to the mast overall authority for a maritime ETS, acting should not be a funding mechanism for with respect to an ETS, but a European as a ‘process owner’ and then appointing an resolving global warning and that shipping maritime trading system has yet to find a agency to handle the administration of the should not be unnecessarily penalised.’ champion amongst them. A spokesman for scheme. He believes a maritime ETS should There are such fundamental differences the UK Chamber of Shipping (which is be fully fungible with other trading schemes of opinion on this issue that it is difficult an advocate of a global cap and trade system) in order to give it liquidity. ‘Other markets to believe there will be any quantifiable pointed to the ‘difficulty of a plan which would then see shipping as a source of carbon progress over the next 12 months. The EC’s affects trade when in Europe in a way that – I would see the sector as a source rather pragmatic approach may prove to be the is different from the way that international than a net buyer of carbon.’ catalyst to break the stalemate – in a sense, an trade is affected’. There has to be a global However, there is, of course, no overall EC proposal may be the only way to stir the solution,’ he says. ‘Shipping has to deal with unanimity on the subject of an ETS for UN from its bureaucratic torpor. However, its global footprint – if you start tinkering at shipping. At a meeting of the International while a European solution may have political the edges, you might remove the urgency, the Chamber of Shipping in April, its backing, there is no obvious support from the international impetus to do something’. Chairman, Spyros Polemis, cautioned that: shipping industry. This view is shared by INTERTANKO. ‘Whatever is agreed, market-based measures A global GHG emissions reduction A spokesman told Bunkerspot that the must be demonstrated to deliver genuine strategy for shipping will have to be association supported the IMO in its and direct environmental benefit, rather than implemented at some point in the future, but, deliberations, and that any future measures simply being used as source of revenue for make no mistake, it is a huge undertaking – ‘should be done on an international basis – governments, or to compensate for lack of way beyond the war of words in the UN to do it on a regional basis would seriously progress in other industry sectors. and in other corridors of power. Consensus complicate the whole situation’. ‘Shipping is already the most carbon among shipping stakeholders will not be John Aitken, Secretary General of efficient form of transport, but we are not a easily achieved in any event, but until Shipping Emissions Abatement and “cash cow”’. someone tackles the problem of CBDR head Trading (SEAaT), also agrees that if Europe BIMCO takes an even more hard line on, without prevarication, MBIs or any other follows its own course on carbon trading for approach to the whole question of shipping’s propositions can be nothing more than verbal shipping then it ‘signals a fragmentation of relationship to GHG emissions reduction. constructs built on constantly shifting sand.

28 www.bunkerspot.com June / July 2010 bunkerspot Environmental Issues Fuelling the future

Gijsbert de Jong of he environmental impact of shipping has been a hot topic ‘Gas propulsion is now Bureau Veritas reviews Tfor some time and is expected to starting to be introduced remain one of the dominant issues for progress on the use the coming years. In parallel with global to a broader range of efforts to curb emissions of harmful ships, in particular ferries of alternative fuels for substances, the International Maritime Organization (IMO) has adopted the and supply vessels, while marine propulsion revised MARPOL Annex VI and NOx further extension to short Technical Code, which enters into force on 1 July 2010 and will progressively limit sea shipping is envisaged’ the emissions of nitrogen oxides (NOx) and sulphur oxides (SOx) by ships. to the expected rapid growth of the world In addition, on 1 January 2010, the merchant shipping fleet over the coming European Union (EU) introduced the strict decades. requirement of a maximum 0.1% sulphur Such regulations are frequently associated content for fuels used on ships while at berth, with the introduction of market based while California is also to introduce similar instruments (an emission trading scheme requirements. (ETS) or bunker levy) aimed at financing Reductions in NOx emission levels are technical developments for reducing air typically achieved by engine modifications emissions. In addition, shipowners see (IMO Tier II) or exhaust gas cleaning systems themselves confronted with a volatile bunker using selective catalyst reduction (IMO market. Although fuel prices have been Tier III). Reductions of SOx emissions are relatively stable over the first quarter of 2010, obtained by changing to low sulphur there is concern that the volatility of the past bunker fuels or employing exhaust gas years will continue and that bunker prices, cleaning systems using scrubbing technology. along with the economic recovery, will be Scrubbers are also capable of taking out pushed to new records. These developments particulate matter (PM) such as soot. make it worthwhile for shipowners to The next step to be taken is to control seriously consider reducing fuel consumption the emissions of greenhouse gases (GHG) for as well as switching to alternative fuels which

shipping (mainly carbon dioxide (CO2)). To can potentially combine an improvement in this end, the IMO has developed voluntary environmental performance with a reduction guidelines for the design and operation of in operating costs. energy efficient ships. The objective of these In this context, it is interesting to guidelines is to stimulate innovation and consider natural gas as an alternative fuel technical development to increase the energy which is much cleaner than traditional heavy efficiency of new designs (Energy Efficiency fuel oil (HFO) in terms of NOx, SOx, PM Design Index (EEDI) as well as to increase the and CO2. Gas-fuelled engines yield very low energy efficient operation of ships in service NOx emissions and meet the strict IMO Tier through the implementation of a continuous III requirement in Emission Control Areas cycle of improvement (Ship Energy Efficiency (ECA). As natural gas does not normally Management Plan (SEEMP)). contain sulphur, the most stringent SOx Although the United Nations (UN) emission requirements are complied with, climate conference in Copenhagen last while PM emissions are also practically nil. December failed to provide the shipping A switch to natural gas yields a reduction in

industry with a clear framework for reducing CO2 emissions of around 20%, mainly due GHG emissions, the IMO is considering the to the low carbon content of natural gas introduction of mandatory regulations on the compared to fuel oil, which also pays off in basis of the current voluntary guidelines. This the calculation of the EEDI. is considered to be an important issue due Until recently, liquefied natural gas (LNG)

‘Until recently, liquefied natural gas (LNG) carriers were the only Contact: ships making use of natural gas as fuel by burning the natural Gijsbert de Jong cargo boil off in boilers to produce steam power for the turbines. Bureau Veritas Tel: +33 1 55 24 72 34 In 2004, a break-through was achieved with the introduction of Email: [email protected] the world’s first dual fuel diesel electric-propelled LNG carrier’ Web: www.bureauveritas.com

30 www.bunkerspot.com June / July 2010 bunkerspot Environmental Issues

carriers were the only ships making use of is cheaper than low sulphur gasoil, so large natural gas as fuel by burning the natural scale use of LNG could be expected to yield ‘The high acquisition cargo boil off in boilers to produce steam economy of scale benefits. power for the turbines. In 2004, a break- Government-backed financial incentives price and maintenance through was achieved with the introduction to promote cleaner shipping may provide costs of fuel cells create of the world’s first dual fuel diesel electric- further momentum to the development of an economic barrier, propelled LNG carrier, Gaz de France Energy. gas propulsion. Depending on the level of This innovation, boosting the efficiency of investment in gas propulsion and supply, while the absence of the propulsion system from 30% to 50%, was marine gas propulsion may soon become an a global distribution introduced through the cooperative initiative economic and green alternative for ferries of Gaz de France (GdF Suez), Wärtsilä, and short sea shipping. network is also a serious Saint Nazaire Shipyard (STX Europe) For the longer term, in particular when practical constraint’ and Bureau Veritas. further reduction of the carbon footprint In the meantime, the concept has been of shipping is considered necessary, it is selected for more than 50 LNG carriers. interesting to consider hydrogen as alternative international regulatory framework covering In 2009, the LNG carrier Coral Methane, fuel. Hydrogen can be used as energy carrier the safety of complex fuel cell power systems. running solely on gas-fuelled engines, was in a fuel cell power system to produce very The main safety concerns are the use of delivered to Dutch shipowner Antony clean electrical power. The total absence of flammable gas with a low flash point, the

Veder under Bureau Veritas (BV) class. on-board NOx, SOx, PM and CO2 emissions application of ultra-high pressure vessels Another recent development concerns enables the design and operation of a zero- or ultra-low temperature liquid cryogenic liquefied petroleum gas (LPG) carriers fitted emission ship. In addition, there is an overall gas storage, the high electrical intensity with diesel generators which can burn LPG reduction in fuel consumption due to the and the presence of hot surfaces and fluids vapours together with fuel oil to prevent the higher efficiency of fuel cell power systems in the vicinity of hydrogen gas. In order release of vapours into the atmosphere during compared to internal combustion engines, to address these issues, Bureau Veritas has cargo transfer operations at the terminal. For particularly in cases of low power demand. issued its Guidelines for Fuel Cell Systems example, the Isabella Kosan was delivered Obviously, true elimination of CO2 emissions Onboard Commercial Ships, which combine to Lauritzen Kosan under BV class and is only possible when the hydrogen is the existing knowledge and experience received the Lloyd’s List ‘Ship of the Year’ produced using renewable energy sources. concerning LNG propulsion with the award in 2008. However, current fuel cell technology is hydrogen specific issues, thus providing ship far from mature. The available power from designers with a solid basis for realising fuel Short sea shipping fuel cells is insufficient for the propulsion of cell projects. Gas propulsion is now starting to be large merchant ships. The lack of information introduced to a broader range of ships, in about long term system performance also Near zero emissions particular ferries and supply vessels, while poses a challenge. The high acquisition One such programme is the Green Tug, further extension to short sea shipping is price and maintenance costs create an a Dutch design project for a near zero envisaged. To this end, Bureau Veritas has economic barrier, while the absence of a emission harbour tug led by Offshore Ship developed the Safety Rules for Gas-Fuelled global distribution network is also a serious Designers and in which Bureau Veritas is Engine Installation in Ships. The main practical constraint. The major design issue is participating to provide validation of the objective of these rules is to set acceptable the storage capacity required for hydrogen, safety issues. During standby and transit, the basic prescriptions and criteria to achieve as it is even higher than for LNG due to its tug’s fuel cells and batteries provide sufficient an equivalent degree of safety and reliability low energy volume. The two most common power, effectively enabling zero emission for ships with gas propulsion compared to storage methods are ultra-high pressure vessels operation. The tug’s diesel generators are conventional ships. Key points are safe gas (up to 700 bars) and ultra-low temperature switched on for generating bollard pull during combustion, LNG storage and distribution liquid cryogenic gas storage (most volume towing operations. Due to the installation systems (no substantial risk of gas leakage or efficient). of four generator sets and an intelligent spillage leading to brittle fracture, fire and/ power management system, it is possible to or explosion), the design of machinery spaces Practical constraints maximise the fuel efficiency by selecting the and system reliability. Given these practical constraints, the main optimum number of engines running at their LNG powering of ships has started in envisaged marine applications for fuel cell highest efficiency. Norway thanks to the combination of a NOx power systems, as things stand, are as an Along with other pilot projects, the Green tax regime and good availability of natural uninterruptible power supply (UPS) (battery Tug shows that it is technically feasible to gas. Worldwide, there is no LNG distribution back-up for emergency power), auxiliary make the next step towards cleaner shipping, network, which effectively blocks gas power supply and main propulsion for small though a number of practical and economic propulsion on merchant ships engaged in craft. The low emission levels also make it issues will need to be addressed before the global trade. a potentially interesting solution for power technology can be commercially deployed. A practical issue is that the storage of supply to vessels operating in ports or coastal Still, a hybrid concept of hydrogen-fuelled LNG on board ships requires more space areas, while the low noise and infrared (IR) fuel cells with diesel generators and batteries than for fuel oil (two to three times), which signatures provide opportunities for military may relatively soon become a very clean reduces available cargo volume. With regard and research vessels. and efficient means to drastically reduce the to economics, it should be considered that if Another important aspect is that until environmental impact of some specialised LNG is purchased in sufficient quantities it recently there was no comprehensive ship types, such as tugs and supply vessels. bunkerspot June / July 2010 www.bunkerspot.com 31 High Seas Bunkering High time for a cha

o one particularly likes change. Per Funch-Nielsen We think we should, because ‘High seas bunkering looks at how high Nconsultants and ‘modernists’ has traditionally been tell us to ‘embrace’ it. The reality is associated with the global seas bunkering is that change is driven, in the main, by necessity; an increase in competition, fishing fleets, but fuelling performance organisational transformation, a financial O.W. Icebunker has seen a crisis like we have recently witnessed, improvements and or the evolution of technology that significant increase in its redefines operations and services. And customer base over the past reducing costs ironically, while scepticism is always the primary emotion, acceptance, belief and year, which now includes conviction always seem to follow. tankers, container vessels, Within the shipping industry, the past 18 months have all been about change. While the bulk carriers and reefers’ financial crisis has expedited consolidation, it has also significantly increased competition of purchase as another means of generating and intensified the pressure from customers efficiencies. This has resulted in a significant to transport goods faster and cheaper. In increase in high seas bunkering activity. response, shipowners and operators have been For many years, high seas bunkering has forced to scrutinise every element of their been a service traditionally associated with organisational infrastructure, supply chain the global fishing fleets, where trawlers, in and methods of operation to identify ways an industry continually faced with dwindling of improving services, increasing efficiencies resources and increased legislation, need and reducing costs as a means of remaining all the time they can get to maximise their competitive. catches. Coming into port is simply not an One area of focus is the method of option. It is a trend, which is now starting to purchasing bunker fuel. Accounting for be utilised by other facets within the industry. over 50% of a vessel’s overall operating O.W. Icebunker, part of the OW Bunker costs, managing bunker fuel procurement is Group, has seen a significant increase in a full time responsibility and a key part of its customer base over the past year, which the overall profitability of an organisation. now includes tankers, container vessels, bulk It is interesting that in the past year, many carriers and reefers. operators have not only implemented The one common denominator for this effective risk management and hedging change is that all of the new customers have strategies to manage price volatility, but have been motivated by the significant efficiency also looked at the actual physical method and cost savings that can be generated, as well

Per Funch-Nielsen is the Managing Director of O.W. Icebunker Ltd.

Contact: Per Funch-Nielsen O.W. Icebunker Ltd Tel: +45 993 18364 Email: [email protected] Web: www.owicebunker.com

32 www.bunkerspot.com June / July 2010 bunkerspot High Seas Bunkering ange?

pilotage, port fees, agency costs as well as tug but also in relation to product quality, where ‘It is vital that suppliers usage. Finally, high seas bunkering provides a highly skilled crews, as well as on-board guarantee the same care guarantee on product availability, when and blending and testing facilities are essential. where the customers want it. There is no There is no doubt that the recent increase and due diligence while at waiting in port for the right product to be in high seas bunkering services is fuelled by, sea as they do in port, not made accessible. and set in the context of, the global financial The conviction of this move to high seas crisis. But evidence suggests that while this just in health, safety and bunkering has also created the opportunity may have been a catalyst for change, for many environmental terms, but to dispel any concerns that some of the operators it is change that will be embraced also in relation to industry may have had about the service. This on a permanent basis, particularly once they is specific to the physical and environmental have experienced the efficiency and cost product quality’ safety of the actual delivery of products while benefits. at sea. The reality is that the methods of Ultimately, it is about providing customers as the real developments that have been made delivery can vary depending on the condition with both choice and flexibility, where in high seas bunkering services over the past of the seas. If calm, the bunker barge can a bunkering solution can be specifically few years. deliver product side-by-side to the tanker. In tailored to meet their operational needs, For a start, deviating from a route can save rough waters, it can be supplied via a stern whatever they may be. High seas bunkering days in time that would otherwise be spent line. Either way, safety is guaranteed. Clearly, is a good example of this, as well as a highly sailing to a port, and high seas bunkering is a the process of building confidence within efficient way of providing operators with an fast and efficient way to refuel for vessels with the industry needs to continue. It is vital that additional option of getting goods to where time-sensitive cargo, virtually anywhere in suppliers guarantee the same care and due they need to be, faster, and at a lower cost. And the world. There are then the additional costs diligence while at sea as they do in port, not in the current market, that is a compelling associated with entering a port, including just in health, safety and environmental terms, proposition for anyone.

bunkerspot June / July 2010 www.bunkerspot.com 33 Bunker People Safety first

t was 6.00 a.m. on a Saturday morning don’t want any passing ships to surge us too Captain ‘Pete’ Kysar of and Capt. Philip ‘Pete’ Kysar of badly if they’re slack.’ Buffalo Marine Service Inc. IBuffalo Marine Service, Inc. scanned He kept his door open to help him better the M/V San Tomas’ computer to verify monitor the bunkering and then studied his gives a unique insight into the details of his next bunker job. While Automatic Identification System (AIS) to he had already verified the location, see which vessels were transiting in the City the daily life of a bunker bunker stem details and ship particulars Dock vicinity. with his ‘back watch’ counterpart (i.e. Meanwhile, the Chief Engineer’s tanker captain relief Captain), it never hurt to double representative from the Star Kinn descended check the wheelhouse computer. to the deck of the Buffalo 409 to validate This morning’s first job was slated for the tank barge’s hose certification, verify the M/V Star Kinn located at the Port of pumping rates and product intended for the Houston’s City Dock. As the dawn cast Star Kinn, and determine the type of meter off the previous evening’s shadows, Capt. Pete manoeuvred his tow from the backside of Brady’s Island and set course for City Dock 26. He then verified with his bunker tankerman that the valve configuration was set to pump 850 metric tonnes (mt) of 380 centistoke (cst) bunker fuel from the T/B Buffalo 409. As the native Houstonian navigated the tow past the line of ships moored at the City Dock complex, Capt. Pete took note of the Star Kinn’s mooring configuration. After assessing the ship’s layout, he radioed his tankerman: ‘She’s moored port side to. So I’ll take the San Tomas past her and we’ll set up for a port side delivery. Just keep me honest on the hose alignment during the approach.’ Capt. Pete knew the alignment would not be an issue with the day’s first bunker job since the Star Kinn’s header was set up midships and on the outboard side of the ship. This was an optimal set up for a bunker job since the bunker barge would not extend beyond the stern and the pushboat itself would be well inside the bow of the Star Kinn. After passing the Star Kinn on his starboard side, he slowed the forward momentum of the San Tomas and the Buffalo 409 and began being used to track the transfer of bunkers to twist his tow to starboard. While he had with the Buffalo Marine tankerman. As a already notified ‘Houston Traffic’, the local veteran of scores of bunker jobs throughout Vessel Traffic Service managed by the US the Houston Ship Channel, the tankerman Coast Guard (USCG), of his orders to was familiar with this ‘vetting visit’. He also bunker the Star Kinn, he also had to inform recognised the importance of making the the Port of Houston Authority via radio duty engineer comfortable with the planned that he was preparing to moor alongside the bunker operation. Granted, there were times vessel for a bunker job. when the language barrier made it difficult to ‘Roger, San Tomas, just give us a call discern if the two mariners could understand when you are done,’ responded the Port one another. Nonetheless, with enough dispatcher. hand gestures and rudimentary English the Capt. Pete slowly eased into the Star communications barriers can be overcome. In Contact: Kinn’s outboard side and offered up a rare the case at hand, the Star Kinn’s representative Thomas Marian smile as he nailed the barge’s alignment with had no difficulty in understanding English General Counsel the ship’s header. and the bunker boom was quickly shifted to Buffalo Marine Service Inc. He popped his head outside the facilitate the connection of the hose to the Tel: +1 713 923 5571 wheelhouse door and yelled to the tankerman: Star Kinn. Fax: +1 713 923 5304 ‘It’s a bit easier without the wind and current ‘Safety is everything in this business,’ Capt. Email: [email protected] Pete emphasised. ‘However, if you cannot Web: www.buffalomarine.com to push you around!’ He quickly added, ‘Make sure those mooring lines are tight. I figure out how to properly connect the hose

36 www.bunkerspot.com June / July 2010 bunkerspot Bunker People

to the ship, the Chief Engineer will quickly Capt. Pete as he eyed the boom and hoses the Environmental Protection Agency lose confidence in our ability to perform a to ensure that there was nothing amiss. As a (EPA). This permit covers over two dozen bunker job.’ He went on to add that there former tankerman who is required to keep potential discharges from vessels, which are times when bizarre bolt patterns make it his USCG-issued tankerman licence current include rain water runoff and condensation quite challenging to connect the hose to the as a Buffalo marine captain, he always takes from air conditioning units. Capt. Pete ship’s header. the time to make a round on the bunker stressed that before every bunker job, or at ‘I remember when I first came to Buffalo barge during a job. least once a day, he and his crew are required as a tankerman about nine years ago and I ‘Two sets of eyes are always better than to ensure the tank barge deck is free of any was amazed at all the connections, spacers one,’ he said. ‘Sometimes the hot weather, the type of debris that can be washed over the and exotic bolts we had stored on the tows. noise of the pumps and the length of the job side. I figured it would be impossible to use all can wear on a tankerman. You cannot afford ‘If we are bunkering a grain ship or any of the various configurations for a hose to make a mistake or let your guard down other vessel that can leave dust or residue on connection. Was I wrong! when thousands of gallons of black oil are your decks you are required to clean it up being pumped to a ship that may only have a and keep it out of the water,’ he noted as he Worse than a jigsaw puzzle one or two people who understand English.’ walked back to the pushboat. ‘Some of the ships from Russia have bolt Although this particular bunker job was As Capt. Pete settled back into his chair patterns that are worse than a jigsaw puzzle. not overly challenging due to the midship’s in the wheelhouse, he called the office to There are even times when we commandeer hose alignment and sheltered location, Capt. verify his next job. He then watched the Star the ship’s drill press to add holes to a flange. Pete was alert for any potential problem. He Kinn’s duty engineer exchange documents But, if you bunker enough ships, you gain a was quick to point out that: ‘In this business with the tankerman aboard the barge. sense as to what works and what can cause you cannot afford to get a single drop of oil As he observed the completion of you to have a very long day cleaning bunkers in the water. If you do not have a culture of the bunker delivery receipt (BDR) and off your deck.’ zero tolerance for spills you will not last in verification of the bunker barge’s meter Capt. Pete took in the process and he this game. In fact, we go to great lengths to reading, Capt. Pete pointed out that the was satisfied that the Texan tankerman and ensure that the ship understands that when BDR transaction is one of the most critical engineer from India understood one another’s they disconnect the bunker hose, the blank elements of the entire job: ‘They say the expectations. In just over an hour from the flange - gasket and all – is securely bolted in devil is in the detail. This is Chevron’s oil San Tomas pulling alongside the Star Kinn, place to avoid a spill from the hose.’ and we need to account for each and every the tankerman had fired up the tank barge’s These days oil is not the only thing a barrel. If we put down an incorrect barrel pumps and transferred over 30 barrels of 380 bunker captain has to worry about. A recent count, temperature, or gauge readings, we cst bunkers every minute. change to the Clean Water Act requires cause headaches for Chevron. Unfortunately, ‘We can ramp up our pumps to load over that any vessel over 300 gross tons (GT) a little mistake can cause a prolonged dispute 500 mt an hour but we are typically limited must possess a National Pollutant Discharge between the supplier and the ship.’ to the loading capacity of the vessel,’ noted Elimination System (NPDES) permit from Capt. Pete reviewed the BDR and ensured the barrel delivery count was in sync with his original order as the tankerman headed back to the tank barge to prepare to get underway. He slowly nodded his head as he confirmed all was in order and radioed back to the Buffalo Marine dispatch his departure information. He was informed by dispatch that he had several hours before he had to reload his barge for the San Tomas’ next bunker job. ‘Guess that gives me some time to catch up on our fire fighting and spill response training - that’s what’s on tap this month,’ he remarked.

Good as your last job He told his tankerman to let go his bow line as he angled the tow away from the Star Kinn and checked in with Houston Traffic to let the Coast Guard know he was heading towards his lay berth. While the tankerman was securing his mooring lines, Capt. Pete scanned the ship channel for unreported traffic and summed up the morning’s efforts: ‘You are only as good as your last job. Gotta impress them at the next one!’

38 www.bunkerspot.com June / July 2010 bunkerspot Bunker People Credit where

Nick Browne of GAC he credit manager is invariably the hate figure in bunker companies ‘The credit manager is lifts the veil on the T(or maybe it’s just me). The the one who stops the credit manager is the one who stops the world of the bunker traders from making the ‘wonder deals’ traders from making that seem too good to be true (because the “wonder deals” that credit manager they are), who asks the question about whether payment will be received on 30 seem too good to be days, who gets the difficult decision when true (because they are)’ out with friends and family, and who is the only one who shows surprise that a company we’ve never seen before comes sustained success of any trader or supplier. to us like we’re their new best friend. ‘It At GAC Bunker Fuels I spend most of must be our marketing, or strength of my day on a quest for more information. our brand’ is the cry – but actually, more Because credit decisions are centralised often than not, it is that the customer in London, it is usual to have a couple of isn’t getting credit elsewhere. decisions waiting over night. A lot of the The stock of credit industry professionals decisions that we make are based on spot is rising, confirming the notion that someone nominations with a very short time scale or thing always prospers from a disaster. (perhaps 30 minutes). Like many other The trend of established bunker companies bunker traders, I use credit report agencies employing credit managers is a recognised such as Lloyd’s List Intelligence, Ocean phenomenon, with Bominflot, Chemoil, Intelligence, Infospectrum and Dynamar Rudder and GAC, amongst others, all to help make a decision, but the information recruiting a dedicated credit manager. For they provide – although invaluable – cannot my part, I left Lloyd’s MIU (now Lloyd’s be taken in isolation. Ultimately, if a deal goes List Intelligence) to join GAC Bunker sour, then saying ‘but the credit agency said Fuels on 1 September 2009, having been they were fine for $ low-six figures’ will not employed in order to take on responsibility cover your own position. for credit and free up our General Manager, Information from companies in the Anthony Mollet, to take a broader view of Middle East is very limited, with no legal market issues. In many respects, it is my task requirement for them to provide financial to highlight areas of over caution, where statements, and sometimes limited disclosure credit lines are too low and also to provide policies on giving information to third parties more theory to the credit process. such as the credit report writers. There is no The largest single obstacle facing a new more pertinent place where understanding credit manager is trying to explain the science your customer is key than the Middle East, behind a credit decision, in order to break and this is why as a credit manager also tasked down traditional barriers between those trying with business development I am pleased to to make money and those seemingly trying have extra information available that is to stop a deal being done. It is often the case exclusive to GAC. I have already had many that a trader feels the credit manager is trying examples where I have been asked to grant to stop a trader from hitting targets, and also credit to a company I have never heard of, trying to ruin traditional relationships. The only to check the internal customer database message from the credit manager, though, is and find that one of our marketing managers clear: a deal is not a deal until the money is has played golf with the Managing Director safely in the bank. In that respect, these days of said company every second Tuesday for a deal with a blue chip customer on a dollar seven years (and still hasn’t managed to win). per tonne is preferable to more risky business Insights into a company like that are with suspect counterparties. invaluable. On the flip side, however, they What is clear to my mind as well is that can also prove challenging. To balance long Nick Browne is the Business Development Manager with the number of bunker traders rising, with standing relationships historically on a cash GAC Bunker Fuels UK Ltd as representatives for global communications as they are and with in advance basis on the agency or logistics Gulf and Continental Bunker Fuels Co. Ltd BVI. the percentage of vessels operating reducing, side of things with a half a million dollar all deals are becoming more competitive, credit line for bunkers on 30 days is difficult. Contact: margins are falling, and suddenly the cost of Would you lend your best friend $500,000 Nick Browne financing becomes even more of a sensitive just because he asks for it? Sometimes it is GAC Bunker Fuels UK Ltd issue. This makes credit even more important, a relief when our numbers prove slightly Tel: +44 208 749 7355 uncompetitive. Email: [email protected] as one can’t hide payment delays behind a Web: www.gacworld.com very good return anymore. Understanding Not all day is spent on credit issues, on our customers is therefore fundamental to the battling a lack of information, or training

40 www.bunkerspot.com June / July 2010 bunkerspot Bunker People credit’s due

traders about what a liquidity ratio is GAC Bunker Fuels not to bother selling to and why it’s relevant to their daily lives, customers who are not credit worthy. In that ‘The message from the or checking whether vessels, owners and respect, it is not just about educating bunker managers are Office of Foreign Assets traders about credit, but also those who are credit manager is clear: Control (OFAC) approved. A large part of used to cash up front business. a deal is not a deal until anyone’s first year working for GAC is spent The excitement in the office for me the money is safely in on learning about the GAC group, getting comes from the difference in experiences to know the people that help to sell GAC and expertise. Whilst I educate on credit the bank’ Bunker Fuels, and to understand how other and counterparty risk, I can also learn about parts of the group work, and what possible operational matters and the intricacies of synergies there are, and how to implement bunkering a dredger in Singapore from my successful initiatives from elsewhere into our traders. Additionally, banter in the office at organisation. the time of writing this article has revolved Indeed, communicating with other parts around the financial problems at both of the GAC group is considered so important Portsmouth and Southend football clubs, for GAC Bunker Fuels that our traders are and the chances of Swansea FC making now given a sales call target which weights the playoffs [Editor’s note: They didn’t]. phoning GAC offices as more important Whether talking about our football teams than the key accounts we hold, and far more or communicating with our colleagues and important than cold calling. One battle faced customers, you will find GAC Bunker Fuels from a credit point of view is explaining people are always open and honest in sharing to those in GAC charged with selling the knowledge and expertise that we have.

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bunkerspot June / July 2010 www.bunkerspot.com 41 Bunker People Never a dull

Kerry Bennett of Shell t’s an early start for a Bunker Buyer. Normally, the first calls arrive when I ‘We adopt the same gives an insight into the Iam on the way to the office. A strong standards and governance coffee is usually the first purchase I hectic daily schedule of a make. London is the hub for all of Shell’s with bunker barges as we bunker procurement and we arrange the would for vessels carrying bunker procurement team bunker supplies on behalf of our four main trading offices: London, Dubai, one of our cargoes’ Singapore and Barbados. We also support our shipping activities in the US through our Houston office, as well as other Shell Rotterdam and we have checked the barge businesses, including Shell Chemicals, suitability the previous day, we still have to ShellBitumen, and our considerable check its suitability again the following day liquefied natural gas (LNG) operations for the new enquiry as we do not give any along with our liquefied petroleum gas barge ‘blanket coverage’ for the whole year or (LPG) and Managed Nigeria business. six-month period. This is because the barge We have approximately 150 different ship could have been involved in an incident since operators located in these offices around the we last inspected it or used it for a bunkering. world, both oil/gas, and freight operations. This approach enables us to follow up with All of their ships’ bunker requirements are the barge operators to make sure we are sent to Ian Childs and myself in London. completely happy that the incident has been So, of course, we work 24/7 to support correctly assessed, rectified and closed out their needs. We have a mix of vessels in our to our minimum requirements. If we are portfolio that is made up of group-owned not happy with the feedback we receive, we and managed vessels and vessels we have on could change that particular barge’s rating for time charter. Together, they trade globally Shell business to ‘unsuitable’ and we would and last year we bunkered at approximately no longer be able to use that vessel. 120 ports worldwide. We not only look at the physical quality A key part of the process involves working of the barge, but also perform a management very closely with the operators when they review on the operating company. No matter are planning a voyage or have received how great a bunker barge may be, if the voyage orders from our trading offices. We management of the company does not meet have to ensure that we consider the best port the assurance levels we look for then we still within that voyage to supply bunker fuel to have a risk that this may manifest itself in the the vessel at the least cost where possible, yet way the barge is operated and could therefore not compromising on quality. At times this compromise the safety of the vessel. For us, can be very challenging as Shell operates a these two checks must go hand-in-hand and very strict barging policy. We will only accept we view them both as equally important. a Shell-approved bunker barge alongside our Obviously, we work very closely with vessels. In some parts of the world this is not our vetting department on a day-to-day basis. always possible so we have to be cautious that We are lucky that the team members are also we do not allow our bunker stocks to run based in London so we often visit them at too low. their desks to discuss any issues we might have. We adopt the same standards and governance with bunker barges as we would for vessels carrying one of our cargoes. This ‘As most bunker buyers, means they have to have a full inspection carried out on a yearly or six-monthly basis, brokers, and traders subject to the age of the barge and dead will know, times have weight tonnage. Once the barge is inspected, Kerry has over 18 years of experience in the bunker it receives a rating and the information is put changed dramatically industry. For the past eight years, she has been the into our internal databases. This is a core part over the last five years Bunker Buyer for Shell. Working with Ian Childs, she of the clearance and assurance process that heads the Shell Bunker Procurement team, based we follow every day when working a new in our industry, and the in London. enquiry or checking bunker options. job involves a lot more On occasion, this process can take a consideration, planning, Contact: considerable amount of time, as for every Kerry Bennett new enquiry we have to ask our suppliers to and experience than was Tel: +44 207 546 6425 Email: [email protected] give us the names of the barges that they may previously needed’ Web: www.shell.com potentially use. Even if we are working on an enquiry in a well-established port such as

42 www.bunkerspot.com June / July 2010 bunkerspot Bunker People moment

Shell also has many highly-skilled Marine sulphur contents, and other considerations, Technical Advisors throughout the world, means that we test the quality of our product ‘It is vital to be aware of the whom I can call upon for advice in order more frequently – in order to be absolutely to determine whether or not a bunker barge sure we are compliant with the regulations as high sulphur/low sulphur is suitable. In addition, they are available to well as meeting the ISO 8217 standards. We bunker stocks, when to perform barge inspections for us. Sometimes are now testing gasoil as well as fuel oil to we have to arrange these at very short notice make sure all the parameters are met, and this order, what to order, and if the business requirement is pressing. in turn means that as buyers we have double also make sure that the When we initially adopted our barging the amount of fuel analysis results we monitor vessel has sufficient time policy we encountered some resistance from and follow up in the event of a claim. certain suppliers, who viewed providing us The increased need for testing, coupled to switch over from one with the barge names each time as unnecessary with our barging policy, means that we are grade to the other’ faced with challenges in fuelling our ships every day and we are conscious that the decisions we make as bunker buyers have ‘One of the advantages a direct impact to our trading business and profitability. This is a huge task and, while we of working for a major oil welcome the challenge, we do need a strong, company is that we have reliable, quality-driven supplier base to get it right. all the expertise we need We interface closely with our fleet “in house”’ officers, and they provide us with a bunkering report after every single lifting to enable us to assess the supplier’s performance and check the barge details. One of the advantages of and a waste of effort. In order to maintain the working for a major oil company is that we assurance process, those suppliers that would have considerable expertise ‘in house’. We do not provide this information did not get the not need to go outside for much technical enquiry and this remains the same today. support or legal advice when we have However, I am happy to say that the suppliers queries relating to a bunkering issue or are and brokers we use are now fully onboard handling claims. This is very beneficial to us with this policy and they know that if they as buyers, as it means that we can call upon are quoting for a Shell enquiry it is part of one of our Captains, Chief Engineers or the information they have to provide. Superintendants at any time we need advice As most bunker buyers, brokers, and or assistance with matters that are outside traders will know, times have changed our own knowledge or technical ability. dramatically over the last five years in our This support cannot be underestimated, as it industry, and the job involves a lot more means we can concentrate on doing what we consideration, planning, and experience than are good at with the back-up of a fantastic was previously needed. Today, working on a team. bunker enquiry is not just about getting the We sit very close to our fuel oil desk on best quote and fixing the deal; so much more the trading floor and have our chartering has to be thought about. With important and London products operators close by. new regulations taking effect, such as Information sharing is key and being able to Emission Control Areas (ECAs) stipulating speak directly and plainly across the desks to low sulphur fuel oil coming down to 1.0% each other makes for a very lively day! With and gasoil ‘at berth’ being restricted to 0.1% our fleet, port agency and vetting departments in European Union (EU) ports, the bunker also in close proximity, we are located in the buyer’s role and responsibilities have evolved best place to facilitate our bunkering needs and expanded to encompass new factors. to the highest standard. It is vital to be aware of the high sulphur/ I am sure the next few years will hold low sulphur bunker stocks, when to order, a lot more challenges for bunker buyers and what to order, and also to make sure that the the industry as a whole. With many new vessel has sufficient time to switch over from legislative developments coming our way, we one grade to the other. Now that the vessels will have to be prepared for all the changes are having to burn 0.1% gasoil at berth in ahead. One thing I know is that there is never EU ports, the gasoil tank capacity is quite a dull moment doing this job. If there were, small and some ships have to bunker much I can assure you, I would not be doing it! I more frequently, sometimes for every single look forward to embracing the changes as we discharge. move forward and challenging myself even Having to deal with the different grades, further in the future.

bunkerspot June / July 2010 www.bunkerspot.com 43 Technical Issues Buyer’s guide

Michael Green of Lintec s we move further into 2010, the implementation of the ‘Is the hydrogen Testing Services looks at Afully revised ISO 8217 standard sulphide limit acceptable becomes more of a reality. As the Final the proposed revision of DIS (Draft International Standard) looks for a parameter that to become the finished standard, there deals with a health and the ISO 8217 fuel quality are a great number of questions being raised by fuel purchasers about what the safety issue, rather than standard from a fuel final standard will mean for them and an operational issue?’ the fuel they purchase. purchaser’s perspective Whenever new legislation or restrictions are implemented there is typically a degree crew is of paramount importance as far as

of confusion and uncertainty, and the 2010 H2S is concerned and the overriding issue is version of the ISO 8217 standard is no one of health and safety. different. The current ISO 8217 standard (2005 The aim of the standard is to improve the version) does not set any requirements for

quality of fuel being sold, but in reality are the testing of H2S content and the new standard limits that the standard puts in place going sets out to rectify this matter. to ensure a better quality fuel is supplied? The DIS has proposed a maximum of 2

Certain aspects of the new standard have parts per million (ppm) of H2S in the liquid placed doubts in the minds of fuel purchasers phase as the limit for the new specification, as new and unfamiliar test parameters are with an implementation date of 2012. introduced. However, the question that we would As a leading fuel testing company, Lintec raise based on this recommendation would Testing Services Ltd has already had a great be – is this limit acceptable for a parameter deal of feedback from our clients outlining that deals with a health and safety issue, rather their questions and concerns. than an operational issue?

The most common concerns relate to If a fuel has an H2S content of 2 ppm lubricity, changes to Section 5 and the safety in the liquid phase this can equate to

aspect of hydrogen sulphide (H2S). approximately 200 ppm in the vapour phase. All these factors must be considered, and At this sort of level, even limited exposure fuel buyers must be comfortable with the offers an immediate risk to human health. possible implications before they purchase The new standard does make positive fuel against the new spec. progress by recognising the need to test

Many of the changes that have been for H2S but, unfortunately, does not go far put forward in the draft will be extremely enough. beneficial to fuel buyers as they should It is fair to surmise that future revisions significantly improve the overall quality of of the ISO 8217 standard will need to bunker fuel, and have been well received. address this limit and look at ways that it For example, the proposed reduction of can be reduced. For further development limits for both aluminium and silicon (Al + there is also scope to impose a stricter limit Si), also known as cat fines, and vanadium, and for levels in the vapour phase which would the amendment in the criteria for detection reflect the equivalent content in the liquid of waste lube oil, should all contribute to phase. This would simply allow an additional a reduction in long term wear damage to level of protection and hopefully ensure safer marine engines. working conditions. So too the inclusion of limits for acid content and sodium should have a positive Lubricity effect on prolonging engine life. One of the most common topics for In contrast, many new aspects of the discussion is the aspect of lubricity of bunker standard, such as lubricity and the limit fuels.

for H2S, have prompted a more negative The draft standard states that all distillate Michael Green is the Technical Manager of Lintec response. fuels will now require the lubricity of a fuel Testing Services Ltd. This being the case, the obvious response to be tested if the sulphur content is less than is to ask why have these particular proposals 0.05% (500ppm). Contact: been so poorly received? The proposed lubricity test for the Michael Green revised standard has been stated as the ISO Lintec Testing Services Ltd Hydrogen sulphide 12156-1 method. This method employs the Tel: +44 1325 390 184 Although there are operational issues that can high frequency reciprocating rig (HFRR) Fax: +44 1325 460 055 Email: mg@lintec-group/com be experienced based on high concentrations technique to gauge the natural lubricity of H2S being present, safety of the vessel’s of a fuel. The HFRR technique applies a

44 www.bunkerspot.com June / July 2010 bunkerspot Technical Issues

reciprocating 200 gramme (g) load weight aromatic hydrocarbons. to a ball bearing which is in direct contact The process works by passing the ‘As fuel treatment becomes with a polished metal surface. The wear scar fuel into a reaction vessel together with a observed after a set time frame relates to the feedstock containing high levels of hydrogen more commonplace and overall natural lubricity of the fuel. The limit at extreme pressure. the use of blend/cutter designated in the revised standard for size of The hydrogen reacts with sulphur to stocks increases, greater wear scar is set at 520 microns (μ) for marine form H2S, the nitrogen compounds are distillate fuels. Any fuels that show a wear scar converted to ammonia and the aromatic numbers of marine fuels in excess of 520μ will be deemed as being off compounds become saturated. The high are found to contain specification. pressure feedstock also contains an aqueous unwanted contaminants’ The demand for low sulphur fuels has amine solution which absorbs the H2S and increased greatly in recent months due to allows it to be removed. The ammonia the implementation of the European Union produced is dissolved in the process water (EU) sulphur regulations governing limits for which is removed as ‘sour water’. use in EU ports and in-land waterways. The key factor with regard to this process is the fact that it strips the fuel of its natural Pressure on suppliers lubricating qualities. The increase in demand has placed greater A common misconception is that sulphur pressure on fuel suppliers to provide fuel is a natural lubricant within fuel and the that meets with the current EU limits and removal reduces lubricity. the consequence of this is an increase in This is partially correct in that the sulphur the number of fuels undergoing additional content within fuel is intrinsically linked to treatment to reduce sulphur content. ‘minor species’ such as nitrogen, oxygen and It is this treatment process that raises the polyaromatic species. These linked species are most questions and concerns amongst fuel directly responsible for the overall natural purchasers. lubricity of the fuel. Therefore, as the sulphur The treatment process is conducted at is removed these minor species are also the refinery stage and the main aim is to removed, and so too is the natural lubricity. reduce elements within the fuel that will In addition, the overall hydro-treatment contribute to unwanted emissions when the process can have a significant effect on the fuel is burned. viscosity of the fuel, which in turn leads to In addition to reducing sulphur content operational and combustion issues when it is also designed to remove nitrogen and burned.

600

500

400

Before Treatment 300 After Treatment ar Scar (microns) e W 200

100

0 Sample A Sample B Sample C Sample D Sample

Figure 1: Lintec Additive Investigation

bunkerspot June / July 2010 www.bunkerspot.com 45 Technical Issues

This being the case, we can clearly see that within specific boundaries. ‘The investigation has a process designed to remove components of This being the case, the question that shown that all tested fuel that contribute to unwanted emissions must be asked is: ‘Does the new standard go also has a significant effect on the overall far enough?’ additives significantly quality of the fuel. In the 2010 version of the ISO standard, improved the overall In many cases, the removal of sulphur has Section 5 has been extended but still retains such an effect on the lubricity of the fuel that the overall feel of the original sentiment lubricity of the fuels lubricant additives are required to ensure it is expressed in the 2005 standard. treated. However, suitable for use. For example, it still maintains that As more questions have been raised fuels should be a homogeneous blend of regular applications of regarding application of additives, and with hydrocarbons which should be free from additives to distillate the introduction of new additives to the inorganic acids and used lubricating oils. It fuels will result in market, Lintec felt obliged to investigate also maintains that fuel shall not contain any further so that it could provide its clients added substance or chemical waste but now significant additional with as much information as possible. with the inclusion of Annex B which offers costs that will need to Consequently, Lintec has conducted a further clarification as to the nature of these series of tests designed to look at the overall ‘deleterious materials’. be taken into account’ effects of a selection of additives when applied It goes on to state that fuel should be to a wide variety of distillate fuels. free from any material that renders the fuel The fuels included in this investigation unsuitable for use in marine applications were taken from a range of ports worldwide and that it should be free from bio-derived and were of varying sulphur content. This materials other than de minimis levels of allowed us to gain a clearer idea of the overall FAME (Fatty Acid Methyl Esters). natural lubricity of each fuel and the effect of In making this recommendation it cross each additive. references Annex A, which provides more The graph shown on page 45 gives a specific details relating to Section 5.4. general overview of the results gained from When these additional annexes are the investigation. examined, we find that although they do The investigation has shown that all recommend that contaminants should not tested additives significantly improved the be present they stop short of advising which overall lubricity of the fuels treated. However, compounds are classed as contaminants regular applications of additives to distillate and specifying acceptable limits for such fuels will result in significant additional costs contaminants. that will need to be taken into account. In addition, we would also seek to Clouding the issue question as to whether this aspect of fuel The use of terms such as de minimis would treatment is the responsibility of the fuel also appear to cloud the issue further. In purchaser, or whether it falls under the remit cases where contaminants are found what of the supplier. would be considered to be a de minimis quantity? Some suppliers may view 100 ppm Waste chemicals of a particular contaminant to be de minimis Section 5 of ISO 8217:2005 deals with whereas fuel buyers may consider 10 ppm de the ‘general requirements’ of marine fuel, minimis. and more specifically, aspects of chemical The fact that there is a degree of contamination. interpretation required will always cast doubt As fuel treatment becomes more on what is an appropriate level. commonplace and the use of blend/cutter These are only a few of the main issues stocks increases, greater numbers of marine that have been raised based on the Final DIS fuels are found to contain unwanted and most centre around the tests and their contaminants. implications. As a result, Section 5 of the ISO standard However, one very significant point that has become more relevant in relation to remains open for debate is with regard to fuel disputes between purchasers and suppliers. suppliers themselves. However, as the 2005 standard does not Questions must be asked, particularly highlight specific contaminants or acceptable with regard to their opinions of the proposals concentrations, there are no definitive that have been made, about any additional grounds on which a potential claim could be costs that will be incurred and whether they based. will be passed on to the purchaser. Most The 2010 version of the standard sets importantly of all, whether they feel it will out to provide a clearer indication of what be feasible to provide fuel that meets with is acceptable so that claims may be processed the 2010 standard.

46 www.bunkerspot.com June / July 2010 bunkerspot Technical Issues Talent pool

Ricardo plc tells s the requirements of the increasingly strict maritime ‘The company estimates Bunkerspot about its Aemissions regulations begin to that by implementing bite in regional jurisdictions around plans to develop next- the world, and with the recent sharp next-generation energy fluctuations in global energy prices, ship management and generation low carbon energy management and efficiency is a subject which is coming under intense propulsion technologies, marine energy systems scrutiny. As a company that has long operational fuel been associated with the development of marine propulsion engines – and consumption reductions of has led the development of low carbon between 15%-25% technologies in the road and off-highway transportation sectors – Ricardo plc is are possible’ now aiming to help the marine industry grapple with the challenge of significantly technologies also extends to mechanical improving its energy efficiency. systems, with innovations such as its highly While its primary background is in the promising Kinergy system, a high-speed, automotive industry, Ricardo is no stranger hermetically-sealed flywheel energy storage to marine engine applications. Its founder, system concept with an innovative and Sir Harry Ricardo, made his early career in a patented magnetic gearing and coupling venture which provided a novel form of two mechanism. This high power density and stroke engine to mechanise the local fishing potentially long-life technology combines fleets of the Sussex coast in the early part of simplicity and effectiveness, avoiding the the last century, before forming the company need for (and hence the cost of) the vacuum today known as Ricardo plc in 1915. pumps and seals typically associated with high Throughout its 95 year history, it has speed carbon fibre-based flywheel systems. forged a solid reputation in the development The lack of any mechanical coupling and application of new technologies in a wide or other form of linkage through the range of sectors where propulsion power is system’s casing enables Kinergy to offer a needed, including marine and locomotive use robust, compact and lightweight package at as well as in the automotive sector. During comparatively low cost, which is suitable both this time it has supported propulsion engine for incorporation into new system designs or and ancillary equipment manufacturers in the as a retrofit option in existing installations. In design of numerous new products, as well as addition to these capabilities and technologies, assisting fleet owners with investigations into Ricardo is also something of a leader in the operational issues requiring the application development and application of computer of its in-depth knowledge and engineering aided engineering simulation methods used expertise. for the optimisation of complex vehicle- Ricardo today remains at the forefront based systems. of low carbon transportation and is actively As a result of its technical knowledge involved in the development of the very of the various low carbon technologies latest in fuel efficient engine technologies, available and access to state-of-the-art hybrid propulsion systems, and mechanical simulation technology, Ricardo believes and electrical energy storage concepts for a strongly that advanced marine propulsion wide range of international clients as well systems based on the careful selection of as through the company’s internally funded well proven propulsion, energy storage, after- technology research programme. treatment and waste heat recovery solutions, In the growing area of interest of fuel cell have the potential to bring significant fuel Organisations wishing to register an interest in systems, for example, Ricardo has successfully consumption savings while also meeting participating in Phase 1, or in any of the future assisted in the prototype development of an the requirements of existing and planned modules, can obtain further information from on-board liquid fuel reformer capable of international emissions regulations. [email protected]. converting conventional diesel fuel into The company estimates that by hydrogen efficiently, for a fuel cell industrial implementing next-generation energy Contact: vehicle application. It is also working with a management and propulsion technologies, Yann Rageul number of different research consortia in the operational fuel consumption reductions of Project Director – Marine development of new lithium-ion battery cell between 15%-25% are possible compared Ricardo Shoreham Technical Centre, chemistries, as well as developing the battery with conventional existing marine propulsion UK control system architectures that will enable configurations. Tel: +44 1273 794448 their effectiveness to be maximised. However, if the potential fuel saving Email: [email protected] Its portfolio of energy storage benefits are extremely attractive, the scale

48 www.bunkerspot.com June / July 2010 bunkerspot Technical Issues

of the research and engineering challenge also including possible fuel cells and Stirling required to deliver them is no less considerable, engine applications. The range of energy ‘Ricardo has and, arguably, beyond the resources available storage solutions will include conventional to all but the very largest players in the and state-of-the art battery technologies successfully assisted maritime industry. and ultra capacitors, flywheel-based systems, in the prototype For this reason, Ricardo has announced thermal and pressure based storage. Other the formation of the Ship Efficiency & novel technologies intended to be included development of an

Energy Storage Assessment (SEESA) in this investigation are: fuel reforming, on-board liquid fuel consortium project in which marine liquid nitrogen (LN ) injection in internal 2 reformer capable of equipment suppliers and shipbuilders, as well combustion engines, and super conducting as vessel owners and fleet operators, can pool systems. converting conventional their resources and collectively contribute to The second phase will focus on a more diesel fuel into hydrogen research aimed at enabling the development detailed analysis and investigate the efficiency of significantly improved energy efficiency. of the sub-systems including engine efficiently, for a This pre-competitive consortium will combustion and air handling methods. fuel cell industrial investigate energy management of the Technologies considered will include propulsion and auxiliary power systems, advanced air handling and combustion vehicle application’ and identify potential technology solutions solutions, with a view to identifying how appropriate for the requirements of future ship operational practice can be applications including cruise liners, roll-on/ optimised as the economic climate changes roll-off (ro-ro) ferries, tankers, bulk carriers, and legislative frameworks evolve. container ships, and offshore facility supply Commenting on the launch of the new and navy vessels. In addition to meeting consortium, Ricardo plc group commercial existing and future perceived needs, the director Steve Clarke said: ‘The international flexibility of propulsion configurations in maritime industry is facing the twin the face of potentially changing operating challenge of meeting the needs of emissions requirements will also be considered. regulation in a range of jurisdictions as well as a sharp increase in the cost of energy for Modular approach both propulsion and on-board systems.

The work of the consortium will be arranged ‘Through the SEESA consortium we in a modular format with partners subscribing aim to assist vessel designers, specifiers, to a core programme of work which can be owners and fleet operators to ensure that adapted and augmented to meet their specific their existing and future fleets are optimised needs. The first phase will focus on assessing for future energy storage and efficiency the best energy storage solution combined while meeting legislative requirements and with advanced energy recovery systems for operational needs.’ a complete propulsion system under different operating conditions, including normal Consortium launch operation, slow steaming and up to three While the SEESA consortium is now formally additional duty cycles that the consortium launched, it will remain open to applications members agree as most relevant to their from prospective members throughout the needs. duration of the work. The formation of the

The prime movers covered will include SEESA consortium has already generated diesel and gas engines, and gas and steam significant interest and appears to be extremely turbine systems, with auxiliary power systems timely for the international maritime industry. It marks a new way of thinking about marine energy management and efficiency at exactly ‘The work of the the time that the industry is having to come to grips with emissions regulation and the consortium will be systems-based engineering that it will require. arranged in a modular While emissions control is largely negative in its impact on the bottom line of operational format with partners cost, the extension of this approach into the subscribing to a core realms of energy storage and management could well start to pay dividends for those programme of work which with the foresight to join the research and can be adapted and gain early-adopter advantage. augmented to meet their Organisations wishing to register an interest in participating in Phase 1 or in any specific needs’ of the future modules, can obtain further information from [email protected]. bunkerspot June / July 2010 www.bunkerspot.com 49 Technical Issues Preventative meas

Martin Lucas of he composition of marine fuel oils is changing, and with it the risk ‘The impact of successful Kittiwake argues that Tportfolio to which the health of troubleshooting using marine engines is now exposed. Driven by variable fuel quality is developments in refining and bunkering onboard and online technology, the global economy, as well tools and technology is compromising the health as stricter emissions regulations and the growing emphasis on fuel sulphur becoming increasingly of marine engines content, fuel testing agencies continue pronounced’ to correlate declining sulphur levels, increasing levels of catalyst fines and subsequent engine damage. With fuel some 3%. quality affecting performance, efficiency Higher average levels of abrasives are and maintenance costs, the impact of another side effect. An analysis of the data successful troubleshooting using onboard on marine fuel quality from DNVPS shows and online tools and technology is that the world average Al+Si content in becoming increasingly pronounced. intermediate fuel oil (IFO) grades of marine Residual fuel has been used on slow fuel has increased. DNVPS data shows that speed diesel engines successfully for years Al+Si content in IFOs has gone up from but, unfortunately for users, as refining and 19.0 milligrammes per kilogramme (mg/ bunkering technology has improved, more of kg) in 2005 to 23.5 mg/kg in 2008, while the crude oil can be converted to the more the average sulphur content has dropped. expensive fractions like gasoline. The left- Elevated levels of highly abrasive catalyst fines over residual fuel often contains higher levels can lead to accelerated wear of diesel engine of unwanted components such as sulphur, components such as piston rings, cylinder aluminium and silicon (Al + Si), also known liners and fuel pumps. as catalytic fines, and waste plastics – all of BMT Marine & Offshore Surveys which can have a dramatic effect on engine Ltd is another industry player that has found condition. Unprecedented levels of catalyst evidence of this trend. The company reports fines have also been accentuated by the at least 30 instances of engine damage caused length of time fuel oil sat sedentary last year by fuel problems related to catalytic fines since at the refinery or in floating storage. As heavy 2001. And each casualty required a complete elements, aluminium and silicon condense renewal of pistons, liners and injectors, at a at the bottom of the tank over time and it cost of between $1 million and $3 million is this, the dirtiest fuel, that is sold into the each, with one resulting in a vessel failing to marine market. keep up with a convoy and falling victim to Impending stricter emissions regulations Somali pirates. and the growing emphasis on fuel sulphur Bunker fuel-related problems are also, content have also driven changes in the unsurprisingly, being influenced by the global composition of marine fuel oils. In the economy. Not only by the unscrupulous past few years, high bunker prices and the activities of a minority of bunker suppliers blending of fuel with little attention paid to trying to maximise profits, but also by the the origin and quality of the of hydrocarbon reduced quality of ships’ personnel, notably additives, known as cutter stock, have resulted chief engineers. With some major ship in fuel quality becoming more suspect. This operators reported to have cut crews’ wages is likely to be exacerbated in July 2010 when by a third in attempt to curb costs, it is the sulphur limit is set to drop to 1% in line inevitable that standards may be falling. The with the revised MARPOL Annex VI, and trend for operational cost cutting has led to even further in 2015 when levels drop to the recruitment of less-qualified personnel 0.1% in Emission Control Areas (ECAs). who are less capable of implementing robust To meet demand, it is predicted that condition monitoring practices. Gerry Martin Lucas is the Managing Director of Kittiwake higher volumes of cutter stock will be required Williams, principal surveyor at BMT Marine Developments. to blend residual fuels to optimise sulphur & Offshore Surveys, was recently quoted as content and achieve compliance. This will saying that ‘bad fuel’ in casualties often had Contact: probably result in large regional variations in more to do with poor handling than sub- Martin Lucas marine fuel quality, especially with regard to standard fuel. Kittiwake Developments density and viscosity. Benjamin Toh Festin, a With so many variables influencing Tel: +44 1903 731470 business development consultant from DNV fuel quality and the resulting impact on Fax: +44 1903 731480 Petroleum Services (DNVPS), says that combustion and engine damage, the testing Email: [email protected] of bunker samples is becoming increasingly Web: www.kittiwake.com monitoring these two characteristics alone would achieve average fuel cost savings of important. However, in order to maximise

50 www.bunkerspot.com June / July 2010 bunkerspot Technical Issues sures

effectiveness, sound fuel oil testing practices container ship can spend $10 million on should be supported by monitoring wear; ‘The trend for operational cylinder lubrication in its life. Dependent which is critical to identifying any problems cost cutting has led to the upon trade, load, running hours and other at a very early stage. factors, constant real-time monitoring is There is a clear benefit in knowing what recruitment of less-qualified a vital tool in optimising cylinder lube oil is going on at an exact point in time – not personnel who are less feed rate and, as a result, improving efficiency, just when the engineer can get to a machine decreasing lubricant costs and avoiding issues for a routine, scheduled sample and analysis. capable of implementing related to over and under lubrication. The liner is one of the most crucial and robust condition As risks to the health of marine engines costly components of a ship’s engine and increase, the collective impact of successful monitoring wear not only extends its life but monitoring practices’ troubleshooting using online tools and also protects against considerable financial technology can equate to millions of dollars pain, as the average insurance claim for an maintenance during the ship’s passage to the unexpected liner loss is over $250,000. By next port, or even a route change if necessary, in savings. Sending samples off to the monitoring the scrapedown oil for ferrous and ultimately insures against costly ship laboratory for analysis is an effective means wear, online diagnostic equipment can downtime. of condition monitoring, if you are graced continuously and automatically provide Effective maintenance translates into with the blessing of time. But by the time complete sets of trend data showing levels of obvious cost savings, but monitoring liner the results come back it may be too late to wear in all critical equipment and machinery, wear also helps to optimise lubricant feed heed the warning and implement effective enabling immediate action. This allows the rate. Even electronic lubrication systems do preventative measures. Spotting problems application of corrective measures to avoid not offer an exact science, and resultantly at such an early stage can ultimately make the damage of the liner, including checking a safety buffer is often applied. As one of the difference between damage control and the fuel cleaning system, preventative the engine’s largest overheads, an average financial catastrophe.

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bunkerspot June / July 2010 www.bunkerspot.com 51 Technical Issues Fuel for thought

one are the days when bunker Capt. Vassilis fuel prices were low, and we ‘Well designed, maintained Papadopoulos of Macoil Gcould organise deliveries without and operated centrifuges having to keep a close eye on meeting gives an overview of product specifications and conforming can deal very effectively with to environmental protection regulations. fuels which have water and some of the fuel quality Advances in technology have enabled refiners to squeeze more high-value products sediment levels in excess issues that shipowners out of the barrel, to the detriment of both of the standard – but poorly the quality and quantity of the residual fuel must consider in the left over for the bunker market. This article operated and maintained current market looks at some of the issues that shipowners equipment will struggle to must bear in mind when considering fuel quality. raise even normal fuels to acceptable quality’ Energy and conservation The deterioration in bunker fuel quality has achieved, since water and sludge in the bowl been at least partly offset by a remarkable are never permitted to enter the disc stack. improvement in the thermodynamic Conventional centrifugal separators should performance of engine technology in recent be self cleaning either with total discharge or years. Nevertheless, fuel quality trends and with partial discharge. environmental pressures mean that now, more The fuel treatment system can be than ever before, shipowners cannot afford to improved further by an automatic filtration base their bunker buying decisions on price unit installed to act as a monitoring/safety alone. In order to ensure real value for money, device in the event of separator malfunction. they must focus instead on the calorific value Such a filtration unit is particularly of the fuel, by going for products that are low recommended when conventional separators in density, sulphur and water content. with gravity discs are deployed. It is worth noting that these characteristics Separators can also be supported by are not only important in terms of the fuel’s homogenisers – particularly in cases where energy value. With the planned introduction possible asphaltene sludge precipitation due of Emission Control Areas (ECAs) across the to unstable or incompatible fuels is anticipated globe, sulphur content is now a key bunker or where the sizes of abrasive particles have fuel parameter. Shipowners have been to be reduced. Well designed, maintained and monitoring the water content in their bunker operated centrifuges can deal very effectively fuel for years – but some bunker buyers may with fuels which have water and sediment be surprised to know that water, if present in very small quantities (0.2% mass), actually levels in excess of the standard – but poorly improves the combustion process, owing operated and maintained equipment will to the additional simultaneous breaking of struggle to raise even normal fuels to the droplets, and to a better mixing of the acceptable quality. We cannot overstate how burning substances in air. important it is to clean bunker fuel prior to injection at the engine rail – and this is Fuel oil treatment systems true even if the fuel complies with ISO 8217 Low, medium and high speed diesel engines specifications. are designed to burn marine diesel oil Of course, ships’ crews can only maintain (MDO), while low speed and many medium their equipment properly – and understand speed engines can also accept commercially the complexities of fuel quality and available heavy fuel oil (HFO) with a viscosity environmental regulations – if they have been of up to 700 centistoke (cst). given the correct education and training. In order to remove water and solid Capt. Vassilis Papadopoulos is a Bunker Fuels & contaminants effectively, the fuel oil density at Storage problems Claims Consultant with Macoil International S.A. 15oC should be below 0.991. Higher densities Many problems associated with bunker fuel – up to 1.010 – can be accepted if modern storage and handling stem from the build- Contact: centrifugal separators are installed such as up of sludge in the tanks. As refineries have Capt. Vassilis Papadopoulos the ALCAP from Alfa-Laval, Westfalia’s brought more crackers onstream, we have Macoil International S.A. Unitrol and Mitsubishi’s E-Hydens II. seen an increase in sludge build-up because Tel: +30 210 924 9175 A number of benefits are cited for the bunker fuels now are generally a mix of a Fax: +30 210 924 9170 ALCAP system over conventional fuel heavier residual material that has been cracked Email: [email protected] Web : www.macoil.com.gr cleaning systems. Notably, continuous and a lighter cutter stock, which brings a optimum separation efficiency can be higher risk of incompatibility. This occurs

52 www.bunkerspot.com June / July 2010 bunkerspot Technical Issues

when the asphaltenes or high molecular a minimum settling cubic capacity equivalent weight compound suspended in the fuel is to the amount of fuel that the ship’s engines ‘Mixing bunker fuels lifted precipitated by the addition of the cutter will consume in eight hours of the engines’ stock or other diluents. The sludge which daily consumption – but this capacity will not from different sources settles in the bunker tanks or finds its way give sufficient time or space for aluminium – or even bunkers lifted to the fuel lines tends to overload the fuel and silicon to settle. Instead, the settling and from the same source but separators with a resultant loss of burnable service tanks should have at least the capacity fuel. The abrasive particles in the sludge can of 1½ days’ of fuel each: this would give the at different times also lead to problems with fuel injectors and ship’s master and engineer ample time to – should be avoided’ wear on the engine. rectify any problems. In order to combat sludge build-up, bunkers of different origins should be kept Stability segregated wherever possible and water All residual fuels are blends of a number contamination kept to a minimum. Proper of components. If these components are operation of the settling tanks and fuel oil properly selected, the final blend will be treatment units is essential to prevent sludge stable. In other words, it will not tend to and sediments from entering the engine precipitate asphaltene sludge during storage, itself. A ship’s fuel oil bunker tanks must be heating and treatment onboard ship. thoroughly cleaned as often as possible. The The fuels being blended should have an bottom of the bunker tanks should be cleaned adequate stability reserve. However, it is not every five years (at least), in order to shift the possible to ensure that any fuel, even if it is accumulated sediments. When the vessel is stable in its own right, will be compatible facing heavy weather on the high seas, the with another fuel of a different origin. Mixing sediment will be dispersed in the tank and it bunker fuels lifted from different sources – could overload the centrifuges. or even bunkers lifted from the same source Of the many compounds in residual fuels, but at different times – should, therefore, be the most complex are the asphaltenes. These avoided. are high molecular-weight, poly-nuclear and aromatic substances which contain significant amounts of sulphite, nitrogen, oxygen and Hydrogen sulphide Hydrogen sulphide (H S) is present in natural traces of metals. Asphaltenes should be 2 monitored closely, and should never exceed gas as well as crude oil and other refined 14% by weight. products such as naptha. In bunker fuels, Sulphate Reducing Bacteria (SRB) are said to be one of the likely causes of H S. Ash content 2 The inorganic non-combustible material SRB can be found in dirty storage tanks in the fuel, such as: iron, lead, zinc, nickel, where the conditions allow this micro- organism to flourish. When considering H S sodium, calcium, magnesium, aluminium, 2 silicon and vanadium, contribute to the levels, you need to be aware that 1 milligramme formation of ash. Some of these components per kilogramme (mg/kg) in the liquid phase are abrasive and may cause damage to the will release 100 mg/kg in vapour, depending engine injection nozzles, valves and seats. An on the temperature of the hydrocarbons and excess of ash deposits may cause excessive length of the exposure. When a person is wear or even breakage of the piston rings; exposed to an H2S concentration of more leading to the escape of hot gases. Proper than 150 mg/kg in vapour, his ability to centrifuging of the fuel may reduce the levels detect the gas will be affected by a temporary of non-soluble ash components. paralysis of the olfactory system (nerves in the nose). H2S is a killer and it lurks in all bunker Aluminium and silicon fuels. Consequently, H2S levels must be kept Aluminium and silicon particles are extremely to a minimum of 10 mg/kg in vapour. small – measurable in microns – and so they take a long period of time to settle Material Safety Data Sheet out in a residual fuel tank, even in elevated The amendment to Chapter VI of SOLAS temperatures of 70oC. new regulation 5-1 states that ships carrying A well-designed settling tank should have MARPOL Annex 1 cargoes and marine fuel an inclined bottom to ensure good drainage. oil must be provided with a Material Safety As settling time is a function of oil depth as Data Sheet (MSDS) prior to loading of each well as viscosity and density differentials, tank and every parcel of bunker fuels. depths should be small and practical. All ships should have the International The International Maritime Maritime Dangerous Goods (IMDG) Organization’s (IMO) regulations require Code and Medical First Aid Guide bunkerspot June / July 2010 www.bunkerspot.com 53 Technical Issues

(MFAG) in their libraries so crew can find came into force at the start of this year, and detailed information. ‘Complying with the now ships calling at North American ports must also prepare for higher costs as the ECA Benzene sulphur directives has that extends to 200 nautical miles (nm) from Benzene is an undesirable substance as it is caused difficulties. Using the US and Canadian coast lines becomes carcinogenic. It is a colourless liquid with a DMA/MGO with 0.1% reality. The IMO’s standards for ECAs in sweet odour. It evaporates into the air very general call for a 1% mass sulphur limit quickly and dissolves slightly in water. It is sulphur mass can require beginning 1 July. This would be implemented highly flammable and is formed from both modifications of a ship’s in the US as soon as the IMO approval natural processes and human activity. comes through and national administrative Benzene is also a natural part of crude oil, auxiliary engine’ procedures are completed. gasoline and cigarette smoke. Bunker fuels Complying with the sulphur directives and/or distillates do not contain benzene. has caused some technical difficulties. For method is in the informative annex of the example, using DMA/MGO with 0.1% Acids standard ISO 6619. The units are mgKOH/g sulphur mass can require modifications of Acids can be categorised as strong or weak. which is the symbol for Potassium Hydroxide. a ship’s auxiliary engine and boilers, due to This is a function of the degree to which ISO 8217: 2009 E has proposed a limit of 0.5 lubricity issues. they can be ionised in water. Strong acids, mgKOH/g acid content for DMA/MGO While sulphur oxide (SOx) in the air may for example sulphuric acid or hydrochloric and 1.5 mgKOH/g for the intermediate fuel be harmful to the environment, sulphur in acid, are inorganic and prohibited in fuels oil (IFO) grades. bunker fuel (if present in the right quantity) that meet ISO 8217 standards. can play a positive role – because it combines Some weak acids, which are organic, can ECAs and sulphur with the lubrication oils to create a protective be harmful, even in small quantities. The test The European Union (EU) sulphur directive film, reducing wear and tear on the engine.

54 www.bunkerspot.com June / July 2010 bunkerspot Market Outlook Striking a balance

Stefka Ilieva of esidual fuel oil, or the ‘bottom- of-the-barrel’, continues to ‘Another result of the Poten & Partners, Inc., Rbe a by-product of the global recent economic downturn refining system. Nevertheless, it will looks at future supply and remain an important part of refiners’ and depressed refining demand prospects for the economics and international trade. margins is the deferral of Fuel oil experiences swings in supply refinery expansion and fuel oil market reflecting the offsetting effects of heavier crude slates and refinery upgrades, upgrading projects’ which favour production of lighter and more valuable petroleum products. With Another result of the recent economic refinery utilisation rates driven lower downturn and depressed refining margins is the by the global economic downturn, the deferral of refinery expansion and upgrading supply of residual fuel oil has declined projects. Nevertheless, worldwide refining significantly, thereby helping to better capacity is expected to grow by over 7 million compensate for demand and thereby barrels per day (b/d) or about 8% by 2015. support prices. Led by China and India, the Asia-Pacific The primary uses of fuel oil are for is expected to add about 2.7 million b/d power generation in inland markets and as of pipestill capacity by 2015, partially offset marine bunker fuel for ship propulsion. Its by the rationalisation of 0.7 million b/d of inland use is sensitive to the cost of energy capacity in Japan. North America and the in alternative fuels, such as natural gas and Middle East also add about 2 million b/d coal. Increasingly stringent environmental each to global capacity, offset by a small level regulations also have a significant influence of rationalisation in Europe. Investment in on the supply / demand balance for fuel oil. residual conversion capacity is anticipated

Contact: Stefka Ilieva Poten & Partners, Inc Tel: +1 212 230 2087 Email: [email protected] Web: www.poten.com

Poten & Partners study, Fuel Oil Prospects 2010- 2015, was published in May 2010.

56 www.bunkerspot.com June / July 2010 bunkerspot Market Outlook

‘Overall, fuel oil consumption is anticipated to increase modestly from depressed 2009 levels through the outlook period’

in all regions. Approximately, 2.6 million be further reduced ten-fold from 1% sulphur b/d of high probability refining upgrading to 0.1% sulphur starting from 1 January, projects have been announced, with most 2015. This dramatic drop in fuel quality will of the plus conversion capacity going into require vessels to consume marine distillates North America, the Middle East and Asia in place of low sulphur bunker fuel oil or Pacific. install exhaust gas scrubbers to achieve an World fuel oil production peaked in equivalent emissions level. 2006 at 615 million metric tonnes (mt) Evolving regional balances suggest that driven by growing Middle East, former Asia-Pacific will be the primary sink for Soviet Union (FSU) and South America/ residual fuel oil, with a net deficit of over Caribbean production. Production is 46 million mt in 2010. The Middle East will estimated to decline from 2008 levels by also require a significant level of imports to about 3% by 2013, or by 20 million mt, meet increased fuel oil demand. Growing to 570 million mt, as a result of refinery net surpluses in the Americas, Europe and upgrades in North America, Europe and the FSU will need to find a home in these the FSU. World fuel oil output is estimated markets east of Suez. to rise to about 586 million mt by 2015 As the global economy recovers, it is reflecting a projected jump in the Middle anticipated that the demand for transportation East and South America/Caribbean fuels will boost refinery utilisation rates and crude capacity. Global residual fuel oil fuel oil production will increase as fallout. consumption has been on the decline in The price arbitrage between Western and recent years as a result of lower inland Eastern markets will need to be sufficiently fuel oil consumption, primarily due to high to cover marine transportation costs. the substitution of alternative energies and Demand for very large crude carrier softer demand. (VLCC) tonnage to move long-haul residual Overall, fuel oil consumption is fuel oil to these markets is expected to anticipated to increase modestly from increase and therefore provide support for depressed 2009 levels through the outlook freight rates. Load port limitations should period, as bunker fuel demand recovers also translate to higher demand for the in line with increased global shipping Suezmax and Aframax vessel classes in the activity. fuel oil trade. The Emission Control Areas (ECAs) With no calming of the forces now in the North Sea/English Channel and buffeting this market likely, a grasp of fuel the Baltic Sea have a current sulphur cap oil market fundamentals by its participants is of 1% sulphur for burning residual marine essential for their quick adaptation to change. fuel. While challenging, it is expected Our intent with Fuel Oil Prospects 2010- that the current refining system in both 2015 is to build the reservoir of knowledge Europe and North America can meet this that participants routinely tap as they navigate standard, supplemented by imports. The through the ebb and flow of the fuel oil bunker fuel sulphur limit in the ECAs will market. bunkerspot June / July 2010 www.bunkerspot.com 57 Risk Management Window of opportu

he regulatory reform currently shipping company used a large global financial Chris Thorpe of being proposed in the United institution to hedge its risk, the credit of the HCEnergy considers how TStates is the result of massive financial counterparty was not questioned (at financial derivative bets that went wrong. least back then it wasn’t). The small players, proposed US legislation Those unregulated contracts which were therefore, accepted that their counterparties largely opaque to outsiders may also have would always be liquid and solvent at the for financial derivatives been the principal cause of the market present and in the future. In reality, the meltdown of 2008. The goal of proposed opacity of derivatives in all parts of the bank’s could affect fuel hedging legislation is to increase transparency for businesses created a barrier to information market participants, regulators and other that no financial analyst could uncover. The stakeholders. Why should this be such a proposed legislation will open a window that tenuous subject when all players stand will allow small players to look inside the risk to gain from increased transparency? Is and decide for themselves whether it makes it not an obvious goal to ensure that the sense to engage in a transaction or not. The market participants are fairly protected more transparent derivative transactions are, from the largest players that can affect the easier it becomes to value and compare the entire market? The outcome of prices in the market place. this debate will likely improve the way Hedging products should trade like stocks hedging products are treated using on the exchange. After all, when you buy collateral margin and existing exchange stocks or bonds, you need the money in your clearing models. Who really stands to account to post before you buy them. It makes benefit and do we really understand the sense. The broker then collects the securities hidden costs? from the seller on your behalf and thereafter There are always a few players that reports on the value of that security. In fact, stand to benefit greatly from changes in securities are freely traded with any eligible government policy. The battalions of lobbyists party with the best price at a given time in Washington DC remind us of the budgets in the market. Sound good? Why can’t any committed to influencing political decisions product with sufficient standardisation trade or just maintaining the status quo. The in this fashion? Actually it can and it does in approval of a new policy could make or break the regulated futures market for commodities. a business, or severely influence the demand In fact, there are many choices of exchange in the market. Take, for example, the subsidy meeting places for these kinds of transactions for ethanol in the United States, which drives ranging from locations in Singapore, Tokyo a whole industry of gasoline additives based and Hong Kong, to London, Toronto and on corn. Despite unfavourable economics Chicago. Not only are there many exchange and questionable theories about the energy alternatives, but the tools and platforms to see costs of processing corn to make ethanol, value and gather information are significantly the corn and ethanol industry lobbyists have more convenient than tools in the non- succeeded in driving up ethanol content to cleared market. as high as 10% of the total gasoline pool in the United States. Clearly, there are certain Shopping around players that stand to gain more than others When a hedger is quoted a price in the – and, in this case, important votes are the exchange cleared marketplace, they can biggest factor. easily shop around for competitive bids and Chris Thorpe is a Managing Partner with HCEnergy Granted that politicians need to be offers from a deep pool of counterparties in LLC. questioned regarding motive, let’s examine the market. The hedger can also see the last HCEnergy is a dealer of commodity options, why proposed legislation in financial price that was traded for a particular contract. swaps and futures with a focus on energy. The derivatives deserves a moment of our time. This is only possible when derivatives, such firm has offices in New York, Singapore and Zug, The public was ensnared in the financial crisis as swaps, are clear and standard, where all Switzerland, servicing counterparty clients that in large part due to large opaque derivatives parties understand their specifications. In the use regulated exchanges as the principal clearing that were created within the inter-bank majority of cases, contracts are standard in platform for trades. Regulated exchanges are market. Financial institutions had created nature and fit the exchange model perfectly. being strongly supported by US and UK/European all sizes of hedge products, including multi- In fact, many exchange cleared contracts legislation currently under consideration. billion dollar contracts on potentially illiquid were created to address the demand of products. These contracts were not disclosed hedgers in the existing over-the-counter Contact: in size or risk to stakeholders, counterparties (OTC) marketplace. The cleared market was Chris Thorpe or regulators. Let’s just consider the hedging modified following the lead of the New HCEnergy LLC customers. Consumer fuel hedgers (those York Mercantile Exchange (NYMEX) Tel: +1 212 774 5963 who simply buy insurance against price and the Intercontinental Exchange (ICE) Email: [email protected] increases in energy) had no idea what many to accommodate commercial OTC hedgers of their counterparties had at risk. When a following the Enron crisis in 2001, so it has

58 www.bunkerspot.com June / July 2010 bunkerspot Risk Management unity?

already developed to the point that energy the market in that it should not need to post the cost of capital to either party. Some may hedgers will find the products they need in a margin while others should. At the same be able to use debt financing, others equity. standard format. time, the smaller players, including corporate Either way, cash (or cash-like securities There are no surprises in exchange consumer hedgers, argue that using cash for such as treasuries) is posted as margin. The cleared futures, swaps and options contracts. margin positions is not an efficient use of second greatest feature of the exchange The playing field is level for everyone using capital. Both the large and the small players is the alternative of using options to avoid the exchange clearing market, similar to the are missing the point. Margin posted in a posting collateral margin. When options are global stock and bond exchanges which are cleared exchange account is just your own purchased, the only cash commitment to the the norm for public securities. Using these money securing your own hedge. In other hedger is the initial premium of the option. exchanges, investors are protected by market words, since all parties post collateral, the In more advanced strategies, options can also regulators which demand disclosure and whole system becomes self-insured against be used to minimise or cap margin on fixed certain standards. The exchange market is not default. price swaps. Those who oppose margin often perfect, but it provides information and equal The greatest feature of the exchange overlook the available strategies to minimise access for all participants. clearing model is the modest margin that is cash demands for hedging products. So who then benefits from reform in collected to offset initial default risk. Initial Though hedgers often complain that the derivatives markets? Most likely, it is the margin is the amount needed for the clearing ‘cost’ of margin is too high, I argue that the smallest players in the market. Even reform house of the exchange to insure itself against cost of margin is known and exists within off- advocates such as Warren Buffet attempted to the loss of a derivative in the course of a single exchange or on-exchange derivatives. Only modify the legislation to benefit the larger day. Both parties accept this and both post the in the case of exchange cleared derivatives institutions. Buffet claimed that Berkshire same amount. So neither party to a trade is at is the real cost of margin spelled out in clear Hathaway’s balance sheet, specifically its risk of the other being able to pay regardless terms. In the case of bank OTC transactions, $20 billion cash position, set it apart from of the outcome. The real cost of the margin is initial margin is often included in the pricing

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bunkerspot June / July 2010 www.bunkerspot.com 59 Risk Management

of the deal, which compensates the bank for lose in the debate on clearing of derivative passing health care legislation, US President absorbing the cost of initial margin. These contracts? At a recent industry conference, Barack Obama has focused his efforts on the off-exchange OTC deals can include a I had the opportunity to approach Gary financial reform legislation that will include provision for an eventual margin call anyway, Gensler, the current Commodity Futures derivative clearing language. In the latest so eventually the teaser benefit ends and the Trading Commission (CFTC) Chairman, version proposed, there is an exemption for true impact becomes more tangible. The way regarding what parties may be appeased just commercial hedgers, which will give the I see it, the true cost of off-exchange OTC to get a deal through. I asked him whether necessary leeway to smaller players to do what transactions is the cumbersome and expensive he would consider some kind of limitation suits them based on their needs. Thankfully, legal process to review the quasi-standard (specifically on the size of positions taken the smaller player gets the option this time. International Swaps and Derivatives by hedge funds) on the proposals in order to With regulatory reform and increased Association (ISDA) contracts. Not only ensure the Bill passing in Washington. transparency, energy and fuel hedging will are these contracts difficult to negotiate, His answer: ‘We will get it through as become a core tool that more businesses they require periodic reviews and are not proposed.’ In other words, special interest will use. It will become less speculative and transparent to all stakeholders. Furthermore, groups such as hedge funds and banks would harder to hide in terms of reporting and they greatly limit the parties that one can not get exemptions that they were looking financing. The larger players will be forced trade with in the future, locking in the for, such as size limitations (for hedge funds to report more and enhance transparency in relationship with the hedge provider. This speculating in the market) and banks that the market. Most likely, greater transparency marriage between two parties is normally claimed it was impractical for their businesses and education on the subject of derivatives very happy at the onset, but longer term models. Again, the largest players have the will induce more players of all sizes to use the these can become more acrimonious and most to lose and the smallest players the most exchange clearing mechanisms, increase the restrictive to change. to gain. liquidity of the market, improve prices and Assuming the cost of margin is the most Gensler indicated that legislation would drive down the cost of hedging, especially for worthy point of debate, I ask again who is to be completed before November. Since consumers who need it most.

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60 www.bunkerspot.com June / July 2010 bunkerspot Bunker Terminalling Stay grounded

Adrian Tolson of Chemoil hipping may be slowly recovering from recession; recent news suggests ‘The land-based bunker argues that terminalling Sthe industry is as buoyant as it has fuel storage and terminal been for 18 months, yet few segments provides a sound footing of the market have escaped turbulent business has remained times. One of the few exceptions to that buoyant, despite the amid the volatility of the rule has been the land-based bunker fuel storage and terminal business, which has economic challenges of bunker market remained buoyant, despite the economic the past two years’ challenges of the past two years. The downturn in world oil consumption might have been expected to have severe recording record bunker sales. consequences on physical bunker suppliers, For a physical supplier like Chemoil, the which handle significant flows of refined decision to build its flagship 482,000 cubic fuel oil products. However, demand for metres (m3) Helios terminal on Jurong Island storage and terminal facilities, particularly in Singapore in 2008 goes back several years from trading institutions, has been steadily and was based upon forecasting continued growing. growth in the Singapore bunker market and Many consider storage terminals to be the Asian oil products markets and the role a a recession-proof business and certainly state-of-the-art storage and terminal facility the key players have been announcing like Helios would play. impressive profits and big expansion plans, While many ports do suffer from land but the industry still needs to adapt to its availability issues, as is the case with Singapore surroundings. and Rotterdam, this hasn’t stopped new There is no doubt major players are storage terminals from being built. Storage adapting to market conditions by expanding development projects are underway at ports in strategic locations and either upgrading around the world, particularly in the Middle or building new storage terminals; invariably East. Although the Port of Fujairah is already leading to increases in existing storage capacity. the third largest bunkering port in the world, Deep-water ports and those with access to investment continues to be pumped into the large markets are, as might be expected, being region’s storage capacity. Chemoil is one of targeted and doing particularly well. several marine fuel suppliers building new Key global bunker storage locations such storage terminals in Fujairah; in this case with as Singapore, the Amsterdam-Rotterdam- joint venture partner Gulf Petrol Supplies Antwerp (ARA) market and Fujairah, which (GPS). Chemoil’s increased storage capacity serve some of the world’s main oil refining will be in the form of a modern and compliant centres, have seen their operators perform terminal, which will take existing capacity to well in uncertain times with high tank 680,000 metric tonnes (mt) by 2012. occupancy and throughputs. While trade Projected demand for varying fuel between global oil refining hubs has been specifications in different regions combined robust, recovering swiftly from initial falling with the current inbalances between supply demand, the increasing scope of marine and demand for oil products in many of these fuel specifications in different regions, for same geographies, does certainly impact example, has augmented any slowdown with separate grades of fuel oil and distillates’ storage tanks in demand. The formula is simple: increased fragmentation of product ‘Some of the recent specification to meet new environmental regulations matched with increasing focus on investment made in health and safety has required more demand storage terminal expansion Adrian Tolson is Vice President of Sales and for storage capacity. Marketing of Chemoil, one of the world’s leading Some of the recent investment made has allowed some ports suppliers of marine fuel. in storage terminal expansion has allowed to strengthen their some ports to strengthen their position in Contact: bunkering, and importantly, ensure the ports position in bunkering, and Adrian Tolson are more viable as global trading and logistics importantly, ensure the Chemoil centres. ports are more viable as Tel: +1 415 268 2740 An increase in refining capacity around Fax: +1 415 268 2704 Asia over the past year has bolstered the global trading and Email: [email protected] world’s largest bunkering hub of Singapore logistics centres’ Web: www.chemoil.com amid recession. The island state is once again bunkerspot June / July 2010 www.bunkerspot.com 61 Bunker Terminalling

where investments in new storage capacity products. ‘Any new terminal that will be made. While the advantage of high utilisation Removing congestion at the terminal rates in storage capacity supports a buoyant is built today would be with faster terminal turnaround rates has market, competition is still there and efficient expected to be fully become an important competitive factor terminalling remains a prerequisite for automated and operate for the modern terminal when it comes to customers – from the rapid loading of barges the transfer and handling of bunker fuel. for delivery through to inter-tank transfers with pumping capacity of Ultimately, customers benefit in terms of and blending services. up to 1,000 metric tonnes better access to marine fuel products and Control of all stages of the fuel supply bunkering services. chain is vital to the sustainability of a bunker an hour for bunkering and Many oil products’ ports remain business. In times of instability and market be able to handle the full heavily congested and therefore terminal volatility, quality assets such as terminals and range of refined efficiency has become paramount. The well- storage continue to be profitable elements – designed modern terminal utilising the and in the case of Chemoil they are a key oil products’ latest technology and supported by flexible element of the company’s diversified supply berthing, is increasingly making a difference strategy and flexible sales mix. The ability to turnaround times. to acquire, develop and control physical Any new terminal that is built today infrastructure within the supply chain would be expected to be fully automated enables suppliers like Chemoil to adopt a and operate with pumping capacity of up to progressive and controlled and customer- 1,000 mt an hour (mt/h) for bunkering and oriented approach to sourcing and delivering be able to handle the full range of refined oil bunker fuel.

62 www.bunkerspot.com June / July 2010 bunkerspot Events Order from chaos

mbracing the theme of this year’s the US military. Llewellyn Bankes-Hughes Maritime Week Americas (MWA) The technical session provided much looks back at the recent Econference, Thriving on Chaos, ‘new’ information to delegates, with Nigel a string of high-level speakers amply Draffin, Technical Sales Manager of LQM Maritime Week Americas demonstrated that huge opportunities Petroleum Services – and prolific author still exist for those who know where on bunkering issues – explaining why there conference to look for them, while the pitfalls is now so much fuss being made about gasoil. of bankruptcy and hardship can also Dr Rudy Kassinger, Consultant for DNV be avoided by those minded to look Petroleum Services, followed up with an after themselves. The week-long event, historical perspective of fuel quality issues, organised annually by Petrospot, took while Capt. V. Suresh, General Manager - place in South Beach, Miami in late Global Operations at Viswa Lab Corp. in May and attracted over 150 delegates, Singapore, looked at the damage that poor speakers, sponsors and exhibitors, many quality fuels – particularly those supposedly of whom seemed not only to have within specification – can do to ships’ survived the recent economic turmoil engines. and global shipping downturn, but also Adrian Tolson, Vice President of Sales appeared to have flourished. & Marketing at Chemoil Energy, provided Bill Johnson, Director of the Port of a scathing view of the proposed changes to Miami, opened the event and flagged up bunker quality standard ISO 8217:2005. some of the many capital investments that Bunkering operations were addressed by the port is undertaking, such as building a Cathie Johnston, Lab Business Development deepwater tunnel to enhance road access Representative at Intertek OCA, who to the port and deepening the water at its looked at sampling and blending. Patrick J. terminals to at least 50 feet to allow the next Studdert, President, and Tom Marion, General generation of giant container ships to use Counsel, of Buffalo Marine Service, Inc., the port once the expansion of the Panama provided a lively look at barging operations, Canal permits the larger container ships to including the use of flow meters, a theme operate. taken up by Jesper Rosenkrans Odum, Alvaro Diaz Bild, Marine and Aviation Business Development Manager at Maersk Manager of Cepsa Marine Fuels S.A., Oil Trading, who once again highlighted outlined how the Spanish oil company has the operational efficiencies associated with survived the financial crisis through careful Coriolis bunker meters. fuel hedging, while Paul Litvinov, Manager International environmental regulations, of Fuel Derivatives and Trading at Royal including the many deliberations at the Caribbean Cruise Lines Ltd (RCCL), International Maritime Organization demonstrated how sensible planning and (IMO), were ably covered by Ian Adams, financial management has helped see the CEO of the International Bunker Miami-based cruise company through Industry Association (IBIA), while US difficult times. regulations were covered by Thane Gilman of the US Coast Guard who, sitting as a Decade of change member of the ISO Cold Ironing Standard Tom Reilly, CEO of Oceanconnect Inc., Working Group, also looked at cold ironing looked at the past decade of change and and the development of an international the opportunities for the future, reminding standard on shore power. delegates of the dangers that still lurk beneath The final main session of the conference the surface. Frank Shea, Executive Vice focused on bunkering in the Americas, President and Chief Risk and Administrative with Robert Atkinson, Managing Director Officer for World Fuel Services Corp. America at KPI Bridge Oil Inc., providing and John Phillips, Global Credit Manager an overview before José Digeronimo, General Llewellyn Bankes-Hughes is the Managing Director of Chemoil Energy, both looked hard at Manager at VT Shipping International of Petrospot Limited, the publisher of Bunkerspot credit issues and provided blueprints to aid Inc. updated delegates on Panama and the and organiser of Maritime Week Americas. survival in these troubled times. Meanwhile, canal expansion, Eugenia Benavides Buitrago, ship arrest specialist Steve Simms, Principal at Marine Director at Organización Terpel Contact: Simms Showers LLP, used a Dirty Harry S.A., spoke about bunkering in Colombia, Llewellyn Bankes-Hughes film clip to demonstrate what (not?) to do and Ramon Espinel, General Manager Petrospot Limited when the deal goes wrong. Representing at Navipac S.A., looked at bunkering in Tel: +44 1295 814455 the US Government Fuel Card Program Ecuador. Frank Ray, General Manager of Fax: +44 1295 814466 Management Office of the Defense Energy Global Fuel Supply at RCCL closed the Email: [email protected] Web: www.petrospot.com Support Center, Alexis Anderson explained conference, bringing a certain order to the secure bunker transactions and how to supply chaos that had been the theme throughout. bunkerspot June / July 2010 www.bunkerspot.com 63 Events

The international event for shipbuilding and Tel: +44 20 7017 5510 Events Diary marine technology. Fax: +44 20 7017 4745 Contact: Hamburg Messe und Congress Email: [email protected] GmbH Web: www.informaglobalevents.com JUNE Tel: +49 40 35690 SINGAPORE: SIBCON 2010 Fax: +49 40 3569 2203 27-29 October, Singapore GREECE: Posidonia 2010 Email: [email protected] 7-11 June, Athens Web: www.hamburg-messe.de The 16th Singapore International Bunkering Conference (SIBCON), organised on behalf of The biggest shipping event of the year. UNITED KINGDOM: The Oxford Bunker the Maritime & Port Authority of Singapore, is Contact: Posidonia Exhibitions SA Course the world’s biggest bunkering event. Tel: +30 210 428 3608 13-17 September, Oxford Contact: Sukumar Verma Fax: +30 210 428 3610 The Oxford Bunker Course is a highly intensive Tel: +65 6835 5130 Email: [email protected] five-day residential training course covering Email: [email protected] Web: www.posidonia-events.com technical, operational, commercial, financial Web: www.sibconsingapore.com SPAIN: TOC Europe and legal aspects of bunkering. Designed for NETHERLANDS ANTILLES: Curoil 25th newcomers to the business and for those who 8-10 June, Valencia Anniversary Conference may already have some experience, it is widely TOC Europe is a forum for terminal operators, acknowledged as the best bunker course in the 31 October-2 November, Curaçao port solution providers and shipping lines. world. A specially-arranged conference on bunkering Contact: TOC Events Worldwide Contact: Luke Hallam Evans and aviation targets industry executives from all Tel: +44 20 7017 4394 Tel: +44 1295 814455 over the world. This will be a unique opportunity Email: [email protected] Fax: +44 1295 814466 to share industry knowledge, communicate on Web: www.tocevents-europe.com Email: [email protected] current maritime and aviation issues and enjoy UNITED KINGDOM: Bunker Training Course Web: www.petrospot.com/oxford ample networking opportunities during three days of anniversary celebrations which will also 14-16 June, London UNITED STATES: IBIA Annual Convention include a range of cultural, musical and sporting Lloyd’s Maritime Academy’s Bunker Training 20-24 September, Stamford, Connecticut activities. Course offers three intensive days of training. Entitled Everything you wanted to know about Contact: Angela Guiamo, Curoil N.V. Contact: Informa Maritime Customer Services bunkers (but were afraid to ask?), IBIA’s annual Tel: +59 994 320 000 Tel: +44 20 7017 5510 conference takes place at the Stamford Marriott Fax: +59 994 613 335 Fax: +44 20 7017 4745 Hotel. Email: [email protected] Email: [email protected] Contact: Charlotte Egan Web: www.curoil.com Web: www.informaglobalevents.com Tel: +44 2380 226 555 Fax: +44 2380 221 777 NOVEMBER JULY Email: [email protected] BELGIUM: The Bunkering Symposium GHANA: Oil & Shipping Africa 2010 Web: www.ibia.net 17-19 November, Antwerp 12-15 July, Accra OCTOBER Now established as the major year-end event Following the success of the inaugural event for the European market, the third annual in July 2009, Petrospot will present the second NETHERLANDS: Bunker Experience Bunkering Symposium will again be held in annual Oil & Shipping Africa conference and 4-7 October, Vlaardingen Antwerp. Organised by Bunker Events Ltd, a training course at the Labadi Beach Hotel in This hands-on course offers participants a ‘real- joint venture between Petrospot and Vergo July. This event attracts many local Ghanaian, life’ experience of bunkering in a laboratory, a Consultancy, this unique event is focused on Nigerian and other West African delegates, who – port and on a bunker barge. high-level discussion and debate and includes come to learn and to meet foreign counterparts. some spectacular networking. It also attracts many foreign companies wanting Contact: Vergo Consultancy Contact: Elena Melis to learn about bunkering opportunities in this part Tel: +32 484 16 87 80 Tel: +44 1295 814455 of Africa and to meet local suppliers and shipping Fax: +31 847 47 45 73 Fax: +44 1295 814466 companies. Oil & Shipping Africa 2010 will cover Email: [email protected] Email: [email protected] a range of key issues in the oil, bunkering and Web: www.bunkerexperience.com Web: www.bunkeringsymposium.com shipping industries, including making a case for the UNITED KINGDOM: Managing Carbon introduction of a West African bunkering protocol. Emissions and GHGs in Shipping Contact: Osei Mitchell 11-12 October, London Tel: +44 1295 814455 The debate on shipping’s contribution to Fax: +44 1295 814466 worldwide carbon emissions is becoming Email: [email protected] increasingly important, as possible solutions are Web: www.petrospot.com/africa To list details of bunker-related discussed in international meetings and within events and conferences, contact: governments. Results from these meetings Tel: +44 1295 814455 SEPTEMBER could have a long-term impact on the way Fax: +44 1295 814466 GERMANY: SMM shipping operates. Email: [email protected] 7-10 September, Hamburg Contact: Informa Maritime Customer Services

64 www.bunkerspot.com June / July 2010 bunkerspot Networking

office in Middelfart, Denmark. Tel: +45 8838 Tel: +65 6572 4313; Mob: +65 8138 6943; Fax: On the move... 0014; Mob: +45 6037 3947; Email: csv@ +65 6572 4301; Email: jkw@dan-bunkering. global-riskmanagement.com. com.sg.

After five years as bunker purchaser for the United Bunkering & Trading (UBT) has moved Europe Total group, Jean Laurent Delalande has taken its head office to 8 Shenton Way, #49-01, up a new post within the risk management Singapore 068811. Tel: +65 6303 2288; Fax: The International Bunker Industry Association and marketing team at Total Oil Trading SA’s +65 6303 2289; Email: [email protected]. (IBIA) has appointed Bob Lintott as Vice Geneva office. Tel: +41 22 710 1810; Mob: +41 Chairman. Lintott, who is Managing Director of 79 675 9205; Email: jean-laurent.delalande@ Cem Saral has resigned from his position Trading for US-based ISO Bunkers LLC, will totsa.com. as trading manager in Chemoil’s Singapore then succeed to the post of Chairman when the office. current holder, Mike Ball, steps down in 2011. OW Bunker has appointed Søren Vernersen Tel: +1 757 855 0900; Mob: +1 504 400 4001; as a sales manager at its Swiss office in Reynaldo E. José has resigned from his Email: [email protected]. Meanwhile, Geneva. Tel: +41 223 106 591; Mob: +41 798 position as President of Bunkers Manila Inc. Charlotte Egan has joined the IBIA office in 329 519; Email: [email protected]. Tel: +632 403 4024; Fax: +632 403 4023; Southampton, England, as Events Manager. Email: [email protected]. Tel: +44 8022 6555; Email: charlotte.egan@ Daniel Rose, formerly of Lloyd’s MIU, has ibia.net. joined oil trader Rudder SAM as credit risk OW Bunker has appointed Fiona Zhao as manager. Tel +377 979 76977; Mob: +33 6 43 a bunker trader for its Shanghai operation. Bunker broker Lindsay Blee, a member of the 91 40 17; Email: [email protected]. Tel: +86 21 5130 2288; Mob: +86 1391 8303 Geos Group, has moved to the Chiltern House 099; Fax: +86 21 5130 2299; Email: fizh@ Business Centre, 45 Station Road, Henley on CEPSA Marine Fuels has moved to Campo de owbunker.cn. Thames, Oxfordshire RG9 1AT, England. Tel: las Naciones, Calle Ribera del Loira 50, Planta +44 1491 845415; Fax: +44 1491 414172; Baja, 28050, Madrid, Spain. Phone, fax and Americas Email: [email protected]. email addresses are unchanged. Tel: +34 91 337 6141. Bominflot Bunker Oil Corp. has appointed Bergen Bunkers AS has launched a new Vincent Terracciano, formerly with BP operation, BB Oslo AS, at Lysaker Torg 5, Mideast and Africa Marine, as senior marketer and sales 1324 Lysaker, Norway, with two brokers: coordinator. Tel: +1 713 353 9524; Mob: +1 Joakim Elvenes (Tel: +47 4818 6800) and International Bunkering Middle East DMCC 832 729 6876; Fax: +1 713 977 1275; Email: Lina Aaker (Tel: +47 9768 8446). has promoted Mahsa Alavipoor and Ajay [email protected]. Alexander Menon as senior bunker traders. Tel: +971 Massa, formerly with Chevron Global Marine OW Bunker has brought its Swedish office staff 4437 1700; Fax: +971 4428 1560; Email: Products, has also joined and will initially together at the main location in Gothenburg. [email protected]. Svante Carlberg will move from Stockholm focus on trading in the Houston market. Tel: to Gothenburg, while Ingvar Modin is retiring Muhammad Yousuf has left Orion Bunkers in +1 713 353 9534; Mob: +1 713 295 1126; after 13 years of service. The new centralised Karachi, Pakistan, to become CEO of a new Fax: +1 713 977 1275; Email: amassa@ operation will continue to be led by Managing company, Ocean Bunkers. Tel: +92 21 3285 bominbunkers.com. Meanwhile, Gene Owen Director, Lenah Soldan. Tel: +46 31 7922 250; 9511; Direct: +92 21 3285 9515; Mob: +92 has been appointed as the new President and Fax: +46 31 160 590; Email: gothenburg@ 333 234 4610; Fax: +92 21 3285 9514; Email: Chief Executive Officer (CEO) of Bominflot’s owbunker.se. [email protected]; Web: oceanpakistan. US operating companies. He was previously com. the Senior Vice President and Chief Operating A/S Dan-Bunkering Ltd has promoted Kasper Officer (COO) of Bominflot’s US companies. Fulton Stiedl and Rune Andreasen to senior Adil Sher has taken over the international Mark Vande Voorde, the former President bunker traders and team leaders at the marine sales role from Muhammad Yousuf at and CEO, has been appointed Manager of Copenhagen office. Fulton Stiedl - Tel: +45 Orion Bunkers in Karachi, Pakistan. Tel: +92 Business Development for the Bominflot 3345 5423; Mob: +45 4059 1762; Fax: +45 21 3285 8055; Mob: +92 321 376 0669; Fax: Group, reporting to the Senior Management in 3345 5411; Email: [email protected]. +92 21 3285 8057; Email: orionkhi@cyber. Hamburg. Andreasen - Tel: +45 3345 5432; Mob: +45 net.pk. 2024 5429; Fax: +45 3345 5411; Email: rua@ Veronica Valenzuela has been appointed dan-bunkering.dk. Asia Managing Director of Chemoil Latin America Inc. in Panama, following the resignation of Global Risk Management has appointed Jennifer Kwon has joined Dan-Bunkering Andres Galavis. Tel: +507 2655 070; Fax: Caner Seren Varol as oil risk manager at its (Singapore) Pte Ltd as an accounts executive. +507 2655 088.


 

 

 
 






 


 

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