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INDEPENDENT INTELLIGENCE FOR THE GLOBAL BUNKER INDUSTRY

READY FOR ACTION:Supplying the US Navy

www.bunkerspot.com Volume 8 Number 1 February / March 2011

bunkerspot February / March 2011 www.bunkerspot.com 3

FEATURES

MARKET TRENDS Félix Yamasato of Lloyd’s List Intelligence looks at what 2011 holds in store for the shipping industry 26

Chris Thorpe of HCEnergy looks at the changing nature of the fuel market 28

BUNKERSPOT WORLD MAPGlobal prices and news at a glance 30

FUEL PROCUREMENTSusan Lowe, from DLA Energy Public Affairs, gives a status report on the US Government fuel card programme 32

BUNKER HEDGINGMajor oil consumers are feeling more optimistic and confident about hedging tools, argues Global Risk Management’s Morten Henriksen 36

TECHNICAL ISSUESChristopher Mills of TUV NEL looks at some of the considerations that arise from using Coriolis meters for bunkering 37

BUNKER BLENDINGJon Moreau of Jiskoot looks at recent advances in in-line blending technology for the bunker market 40

ENVIRONMENTAL ISSUESChris Daw of Kittiwake Procal explains the growing importance and benefits of in-situ continuous emissions monitoring 44

As the maritime industry becomes increasingly aware of the importance of eco-safety, JLMD Ecologic Group discusses the development of its Fast Oil Recovery System 46

Don Gregory of the EGCSA predicts what might be the hot environmental topics of 2011 50

SPOTLIGHT ON SRI LANKANavin Perera of GAC Bunker Fuels looks forward to new developments in Sri Lanka’s bunker market 52

EDUCATION AND TRAININGLlewellyn Bankes-Hughes looks at training courses and books designed to enhance knowledge levels within the maritime industry 54

EVENTSEvents and training course diary 56

NETWORKINGBunker people on the move 58

Contents

0706 bunkerspot v6i6.indd 2 02/12/2009 16:05

Bunkerspot is an integrated news and intelligence service for the international bunker industry. The bi-monthly magazine and 24/7 electronic news service, www.bunkerspot.com, both provide highly-specific information on all aspects of the marine fuels industry. Bunkerspot Magazine (published 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 © 2011. 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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NEWS Bunker Overview 4

Europe 8

Americas 14

Africa and Mideast 18

Asia Pacific 22

February / March 2011 bunkerspotwww.bunkerspot.com4

Bunker Overview

Egyptian crisis sparks oil market jittersAll eyes were on Egypt as this issue of Bunkerspot went to press. As the anti-government protests were building up a head of steam at the end of January, President Hosni Mubarak instructed his new Prime Minister Ahmed Shafiq to open the lines of communication with the opposition.

The protesters massing in central Cairo, however, were in no mood to let Mubarak dictate the pace. Calls were going out for an indefinite strike and a ‘million man march’ to show the depth of opposition to the teetering 30-year regime. Observers and media pundits speculated that Mubarak’s ability to hold on would be determined by the will of the military. Mubarak, himself a former chief of the Air Force, tried to improve his chances in this regard by appointing Shafiq as Prime Minister and Omar Suleiman as his Vice President and possible successor. Suleiman, a former intelligence director who was credited with an important role in securing the ceasefire that ended the Israeli military offensive in Gaza in

12 month rolling price charts

2009, was said to command strong support from within the military community. But his appointment did nothing to appease the protesters thronging the streets of Cairo.

Mubarak was offering vague promises of economic reform – but there was a sense of ‘too little, too late’. Furthermore, it is likely that nothing that he can offer will be enough. When item number one on the protesters’ list of demands is ‘regime change’, there probably isn’t much point negotiating over the rest. Mubarak also appeared to be losing the backing of the overseas allies who bolstered his position with billions in military aid over the years. With US President Barack Obama and his Secretary of State Hillary Clinton already talking about ‘an orderly transition’, the writing seemed to be on the wall.

Crude oil prices were already on the rise in January – but fears about possible disruption to tanker shipments in the Suez Canal and the flow of oil through the Suez-Mediterranean (Sumed) pipeline gave them even more

momentum. Of course, it is not just the short-term supply hiccups that are giving investors the jitters. If there is a regime change in Egypt, the new government will probably bring in economic policies that will push up the price of oil. Furthermore, this could spark similar changes in other Middle East, Maghreb and Islamic countries.

Goldman Sachs encapsulated the fears on Wall Street: ‘Although we see the risk of political contagion as relatively low in the more affluent countries, financial contagion has already spread to these regions, raising the cost of production. If these countries feel compelled to increase spending in the face of greater political pressure, it could lead to a rise in the oil price required to balance budgets in these countries.’

As we mention above, oil prices had already been moving upwards before the Egyptian crisis. In the bunker market, the price of 380 centistoke (cst) bunker fuel had increased by around $20 a tonne or more in

400

500

600Houston 380

Singapore 380

Fujairah 380

Rotterdam 380

F M A M J J A S O N D J

500

600

700

800

900Houston MDO

Singapore MDO

Fujairah MDO

Rotterdam MDO


Marine Diesel Oil

PRIC

E $/

tonn

e

380 CST Fuel Oil

PRIC

E $/

tonn

e

400

500

600Houston 380

Singapore 380

Fujairah 380

Rotterdam 380


500

600

700

800

900Houston MDO

Singapore MDO

Fujairah MDO

Rotterdam MDO



Bunker Overview

most of the world’s main ports in January. The upward trend was most pronounced in the Asia Pacific, where the delivered price of 380 cst bunker fuel in Singapore jumped from around $500 a tonne to more than $540 a tonne during the course of the month. The price of marine diesel oil (MDO) had also been on the rise. In Fujairah, the delivered price of MDO came close to hitting $600 a tonne by early February.

On 20 January, Global Risk Management announced that it had hiked its oil price expectation for 2011, citing ‘fundamentals’ as the primary reason.

‘Although there is plenty of crude oil supply, a potential lack of distillates and gasoline supply is likely to push up crude prices,’ commented Global Risk Management. ‘This will support increasing refining margins on oil products such as heating oil and gasoline.’

The company continued: ‘Bullish fundamentals will mainly be driven by rising Chinese oil demand and for diesel products in particular. Apart from a bullish Chinese market influence, an improved outlook for US growth as it shows more robust signs of recovery is also a supportive factor.’

The two ‘jokers in the pack for 2011’, predicted Global Risk Management, were ‘likely to be Iraq and the European debt crisis’. This is probably still true – but with the flare-up in Egypt we are now playing with a deck with not one or even two, but three jokers.

Clearly, operating in the bunker market at the moment could be a risky business, and players of a nervous disposition will not take much comfort from the current state of the shipping market. As Félix Yamasoto of Lloyd’s List Intelligence points out on page 26, some gamblers may have to leave the table: ‘At present levels, some [crude tanker] owners are not earning enough to cover operating expenses’. Yamasoto then hammers home the point: ‘The global tanker fleet is expected to grow by more than 10% in 2011, so unless scrapping picks up even more, tanker rates could remain at the present depressed levels longer than anyone is expecting.’ Depressed could be the key word.

380 IFO December January29-03 06-10 13-17 20-24 28-31 03-07 10-14 17-21 24-28

Rotterdam d 477 481 482 493 493 502 512 513 513Gibraltar d 486 486 491 502 511 512 524 524 528Piraeus d 484 485 483 496 498 508 517 523 527

Suez d 521 515 515 521 536 536 547 540 556Fujairah d 497 504 502 508 516 525 534 545 555Durban w n/a n/a n/a n/a n/a n/a n/a n/a n/a

Tokyo d 531 542 551 550 550 558 569 567 577Busan d 514 529 533 537 537 554 555 564 568Hong Kong d 509 512 512 516 525 529 536 549 553Singapore d 488 495 494 502 503 516 524 538 543

Los Angeles w 505 523 529 544 541 551 545 554 544Houston w 476 490 488 499 499 505 517 514 514New York w 485 496 495 506 506 515 521 521 516

Panama w 501 508 502 514 516 519 532 529 525Santos d 495 502 500 487 492 497 521 517 541Buenos Aires d 488 485 483 486 487 501 499 498 504

180 IFO December January29-03 06-10 13-17 20-24 28-31 03-07 10-14 17-21 24-28


Suez d 529 530 525 534 552 549 564 570 562Fujairah d 528 536 538 539 546 558 572 584 593Durban w 525 536 541 549 549 575 577 577 584




MDO December January29-03 06-10 13-17 20-24 28-31 03-07 10-14 17-21 24-28


Suez d 823 814 822 819 843 832 847 850 855Fujairah d 767 783 791 795 807 836 864 880 893Durban w 764 784 785 803 807 823 840 877 872




KEY: d – delivered • w – ex-wharf • n/a – not available • mdo – marine diesel oil

GLANDER

Bunkerspot prices are compiled from the reports of the four brokers whose market reports have consistently proved the most reliable and accurate: Cockett Marine Oil Limited, LQM, Glander International Inc., and KPI Bridge Oil. Bunkerspot welcomes market reports from other sources for inclusion on its website www.bunkerspot.com


Félix Yamasato of Lloyd’s List Intelligence looks at what 2011 holds in store for the shipping industry

In October 2010, Lloyd’s List Intelligence (LLI) warned of a potentially hard 2011 for tanker

owners, as rates had been so low for more than three months and LLI’s clients were increasingly concerned about possible casualties. This sentiment remained in place in January, since rates remained under pressure for the last three months of 2010.

Tanker rates were higher in 2010 than in 2009 for all classes, ranging from a meagre 1.39% for medium range (MR) clean product tankers to 18.49% and 27.83% for very large crude carriers (VLCCs) and Aframaxes. However, tanker owners faced a difficult second half with VLCC rates sinking below $15,000, Suezmax below $20,000, Aframax to around $10,000 and clean and product tankers even lower. Industry analysts mentioned that product tanker owners and operators seemed to be in more trouble than other classes, but product tanker rates have bounced nicely lately.

Crude tanker rates did not start 2011 any better, and at present levels some owners are not earning enough to cover operating expenses. To understand the trends, LLI reviewed eight publicly quoted tanker companies: Overseas Shipholding Group Inc. (OSG), Teekay Shipping Corp., Frontline Ltd, General Maritime Corp. (GenMar), Nordic American Tankers Ltd, Torm AS, Scorpio Tankers Inc. and Tsakos Energy Navigation Ltd (TEN). Through the first half of 2010, the average operating cash flow margin was nearly 27%, but this dropped to almost 21% for the first nine months of 2010 with the average decline in cash flow margins at almost 55% in the third quarter alone. The operating cash flow margins were below 3.5% at OSG and Teekay during Q3, while the margins at GenMar and Torm were below 8% for the first nine months of 2010.

On a funds from operations (FFO) basis, which is operating cash flow without accounting for changes in working capital, OSG, GenMar, Torm and Tsakos were in the red for the first nine months of 2010. On 11 January 2011, Standard & Poor’s Ratings Services downgraded OSG to B, two notches into speculative grade, citing exposure to spot market rates, which could force ‘further downgrades if weak tanker rates or debt for new vessels causes further deterioration of its credit quality’.

If four of eight publicly quoted tanker companies, or 50%, were already operating, in theory, at below breakeven levels, how many tanker companies around the world were

reaching danger zones as the last quarter of 2010 started, and how many were and will be forced out of the market? LLI notes that scrapping picked up in the last quarter of 2010. The rate of increase in tankers scrapped during the last quarter over the third quarter stood at 65% (69% for product tankers) but still only 33 tankers were scrapped. Morgan Stanley counted closer to 40 units or more than 2.5 million deadweight tonnes (DWT) scrapped.

Of the eight publicly quoted companies we reviewed, only OSG, Torm and Tsakos saw their cash balance decline. The average for all eight companies increased by around 20% with the exception of Scorpio Tankers, which went from a negligible cash balance at the end of 2009 to $43 million. The average decline in long-term debt was close to 5% by 30 September 2010, but this would become harder to accomplish as rates continued to be poor.

The global tanker fleet is expected to grow by more than 10% in 2011, so unless scrapping picks up even more, tanker rates could remain at the present depressed levels longer than anyone is expecting. This would lead to asset write-downs in 2011 that will weaken the balance sheets of even the strongest tanker groups, which as it was the case for GenMar recently, should lead to covenant violations.

An expected 3.9% growth in oil shipments for 2011 and tanker newbuilding slippage of around 35% (as it was the case for 2010) does not appear to be enough to increase utilisation rates higher than the expected 82% for 2011, which would be lower than the 84% expected for 2010.

LLI also recently surveyed companies in the marine supply industry which effectively

Market Trends

Félix K. Yamasato is Regional Manager, Americas Analyst Team with Lloyd’s List Intelligence.

Contact: Félix K. Yamasato Lloyd’s List Intelligence Tel: +1 646 957 8971 Mob: +1 203 667 1082 Email: [email protected] Web: www.lloydslistintelligence.com

‘If four of eight publicly quoted tanker companies

were already operating at below breakeven

levels, how many tanker companies around the world were reaching

danger zones as the last quarter of 2010 started, and how many were and

will be forced out of the market?’

Oceans’ Eleven


provide working capital by extending credit for fuel purchases. The consensus of opinion was that although continuing poor rates can lead to severe financial hardship, there are other important factors that would push a tanker company into trouble.

The issue of leverage was at the forefront; with LLI’s sources mentioning that the year of build and timing of the tonnage acquisition were monitored closely when making credit decisions.

Learning about the time of the purchase provides insight into the likely price paid, as well as the level of financing utilised. One source mentioned that since any owners with tonnage ordered in 2007 or 2008 probably agreed to pay too much and since it takes three years to build, those newbuildings are now starting to be delivered into a poor market for potentially unprofitable trading. Another source noted that it pays very close attention to any owners with orders placed since 2005 or delivered since 2005 as well as secondhand purchases made between 2006 and 2009.

LLI shows in its database that 12 owners have 10 or more units constructed since 2007, with this number rising to 31 for owners with six or more tankers built since 2007. Ocean Tankers led the list with 18 crude oil tankers, enhanced by six VLCCs on order, closely followed by George Procopiou’s Dynacom Tankers with 17 ships and another eight vessels on order, including four Suezmaxes and three VLCCs. George Economou’s Cardiff Marine has added 14 vessels since 2007 and has another eight tankers on order. Angelicoussis Group’s Astro Tankers boosted its fleet by 13 ships but has no newbuildings on order, while Minerva Marine augmented its fleet by 10 tankers.

There were publicly quoted companies in the list of owners with 10 or more vessels added since 2007, namely Teekay, Mitsui OSK Lines, TEN and AP Moller-Maersk, as well as state-owned owners such as Sovcomflot/Novoship and National Iranian Tanker Co.

The state-owned companies are obviously supported by governments, while publicly quoted companies generally have

more options to finance difficult periods via secondary equity offerings or convertible debt issues.

Tanker owners do not have unlimited resources and will run out of cash at some point, with a bunkering source mentioning to LLI in October 2010 that a further three months of depressed rates ‘should see companies in trouble’. Although since those comments were made, there have been almost no reports of changes in payment performance by tanker companies. Most sources mentioned that credit lines have been reduced and performance is closely monitored. In some instances, credit lines for slow performing customers were closed.

Another important issue that was raised in January was assessing risk of tanker charterers. Suppliers and traders are less inclined to extend credit to low asset clients, since recovery of any exposures would be much lower should the charterer face financial difficulties.

However, conspicuously absent was the issue of systematic risk, which could arise if a major player faces trouble and brings down any business with which it had been dealing. None of our sources noted any type of risk mitigation techniques that would involve managing its portfolio of customers by sectors and subsectors.

So, how likely is it that a domino effect will happen following a collapse of any tanker players? Banks still do not seem inclined to take action if the minimum interest payments can be made and write-downs can be pushed into the future or averted altogether if rates improve. This leaves the smaller owners and charterers more exposed to collapse. In fact, Nicola Blastsiotis of Connecticut Capital Management, a Greenwich-based hedge fund, commented that ‘the immediate outlook for the (tanker) sector still looks rough’.

Blastsiotis also added that there seems to be capital ready to be deployed by ‘old school Greeks’ based on the belief that ‘demand will exceed production due to strong rates of growth in the developing world’. However, it appears that tanker asset values are at risk in 2011, which may see a sharp decline before there is a surge in sale and purchase activity.

Market Trends

‘The global tanker fleet is expected to grow by

more than 10% in 2011, so unless scrapping picks up

even more, tanker rates could remain at the present

depressed levels longer than anyone is expecting’

‘Tanker owners do not have unlimited resources and will run out of cash at some point, with a bunkering source mentioning in October 2010 to LLI that a further three months of depressed

rates “should see companies in trouble”’


Chris Thorpe of HCEnergy looks at the changing nature of the

fuel market

When it comes to making predictions and forecasts in the fuel market, it may be that

fundamentals just don’t matter anymore. Market factors that influence price have become increasingly affected by macro-economic drivers beyond petroleum supply and demand equilibrium. The near-instantaneous speed of data and the ubiquitous nature of electronically distributed real-time information allow more market participants to react immediately, therefore decreasing volatility and essentially eliminating traders’ ability to profit from inefficiencies in the market.

From a price management perspective, do we really need to know anything at all about the direction of energy prices or do we simply accept the view that we don’t know and prepare for the worst case scenario? Although market conditions may be explained by fundamental information gathering, the global petroleum market has too many potential influences that impact prices in both the short and long-term. It could be that predicting prices or budgeting is simply a 50:50 bet, odds that are far too poor for most business planning.

Fundamental data, market research and forecasts come at a significant cost. A small business can easily spend $250,000 a year on subscriptions for data and research while larger businesses can spend into the millions. Add to that the in-house analysts or economists who have to read and decipher the reports and the numbers start to really add up – and it is only once it is processed that data can be considered useful information for senior management and decision making. Studies show that business managers tend to be overconfident in their decision-making process in the first place, whether due to anchoring, data mining, past experience, or gut feeling. Data mining can also distort views and create illusions of control. For example, a manager who has forecast a budget may selectively seek out data to support his argument, where he should instead be seeking data to refute it and qualify its reliability. So increasing amounts of data and analysis in price forecasting may simply increase the chance of creating an illusion of confidence.

This is not to imply that fundamental analysis should be put aside or discarded. Without fundamental data, it would be almost impossible to examine the state of the market and use perspective to make informed decisions. We should continuously review and study fundamentals to put the world into

context. Keep in mind, though, fundamentals can support both a bullish case and also a bearish case. I would argue that petroleum markets are likely tipping toward the bullish case due to the fact that the growth rate of supply cannot likely keep up with the growth rate of demand. The bears would argue that there will always be a replacement product or technology that will provide an economic solution to diminishing petroleum supplies. Indeed, fundamentals play an important role in this debate and provide a basis for understanding as we view the future and form our business strategies. As we prepare, however, do they allow us to have a clear view of where the price will be?

It can be argued that there are just too many other factors that impact price in the short-term, which is often viewed as three to 24 months in the future. From a trader’s perspective, when it comes to reducing price risk and hedging for the future, the guiding principal is to use the most liquid instruments in order to have some kind of efficient price discovery and trade execution. Liquidity ensures a reasonable price upon entry or exit of a trade. Indeed, fundamentals provide the basis for buyers and sellers to create an orderly market. When hedgers look beyond the liquid points of trading, the ability to manage price efficiently diminishes rapidly. Fundamentals also play a large part of the dynamics of local markets and when it comes to physical transactions in the spot market, or at least they should.

In global petroleum markets, the difference in price for similar products between geographic markets is known as the basis spread, or simply ‘the spread’. Theoretically, the difference in price for the same product in two different markets should

Market Trends

Chris Thorpe is a Managing Partner with HCEnergy LLC. HCEnergy is a dealer of commodity options, swaps and futures with offices in New York and Zug, Switzerland. Its energy advisory practice focuses on hedging, trade execution and risk management.

Contact: Chris Thorpe, CFA HCEnergy LLC Tel: +1 212 774 5963 Email: [email protected]

‘The near-instantaneous speed of data and the ubiquitous nature of

electronically distributed real-time information allow more market participants

to react immediately, therefore decreasing

volatility and essentially eliminating traders’ ability to profit from inefficiencies

in the market’

Do the fundamental things apply?


be equal to the freight cost between the two markets (taxes ignored). However, this is rarely the case in any market as arbitrageurs or traders can quickly take advantage of any price disparities by moving product to the highest bidder. Local factors lead to large changes in price spreads for many reasons that may not be predictable by any model, research or data. For example, a cold snap may freeze a waterway and limit supply, or fog may halt movements in a port of delivery. Delays in supply may create short term price spikes that would have never been predictable. Large refineries also have a major impact on prices when unforeseen plant outages crimp the supply of refined products. And new refineries tend to be larger scale, which leads to even greater volume and price impact when they are stalled by fire, weather or even labour stoppages, as was seen in 2010 in the French refinery hubs of Fos-Lavera and Le Havre. Indeed, fundamentals impact which product or geographic price point will be affected most. But are these local market issues leading the market or merely a distraction from the big picture? Increasingly, the most important fundamentals may be based on investors, not supply and demand.

The tide of cash that has risen in investor and fund accounts has flooded most commodity markets, especially in the case of petroleum. If you dared to short the market when interest rates in the US were approaching zero, you likely had a very tattered profit and loss statement for 2010. Investors’ changing desire to own energy-based commodities is particularly difficult to estimate. Funds are often disliked and misunderstood as they tend to have opaque strategies and ‘black box’ or model driven trading tactics. When they enter the market, they bring large trade volumes and when exiting liquidate instantly as we experienced in the May 2010 ‘flash crash’ (when the Dow Jones Industrial Average plunged more than 900 points on 6 May on worries about the credit crisis in Greece, before quickly recovering ground). They may be a nuisance or perhaps just answering investor demand, but they are anything but predictable and often not fundamentally driven. While investor behaviour remains fickle, traders tend to stick to text book discretionary trading strategies. Similarly, market tacticians use charts to illustrate how the past is a tool to forecast the future simply based on pictures of data. Although mostly discarded by academics as an illusion, many traders use charts because it is common practice and therefore it impacts market action. To some of the large professional trading houses and

large global investors, day-to-day fundamental analysis may not have a significant role.

Often, directional views of the market deny that there is a 50:50 chance of markets going higher or lower at any point in time. It is hard to fathom at times that prices can go down, whether it be housing or crude oil. Quite naturally, we avoid allowing our predictions of the future to be overly pessimistic. Perhaps this is normal human behaviour, although we know it to be unsound. Recent events also affect our methods of using information based on our own experience, such as using a gut feel or a rule of thumb (often referred to as a market heuristic). In the case of fuel consumers, when prices are high, they predict they will go lower or back to ‘normal’. In the case of homeowners, they predict that their homes will increase in value back to the price they paid at least. Yet there may be no fundamental economic reason that prices will change in the time period expected. Even for markets where fundamentals have a larger impact, such as natural gas or electricity where storage options are limited, prices can vary well beyond expected fundamental value.

Fortunately, the derivatives market provides a window into the cost of insuring future prices. The market prices both directions, allowing us to bet against it and make money or limit our risk. For example, a fuel consumer may accept a floor price for the coming year 10% below the spot market price and collect a premium for doing so.

Timing, as they say, is everything. You may be right, too early or too late. So if you cannot predict the future with any certainty, do fundamentals really matter? Data and research potentially provide a false sense of security and overconfidence about the future, simply because realised market price is likely to be influenced by random events. Well-executed hedging allows us to manage our risk, or limit our bad luck. You may hear reasons for prices being at a certain level, ranging from the running joke that there are ‘more buyers than sellers’ to the more esoteric notion of ‘funds’ trading in the market. Neither reason provides great insight to where fuel prices are or will be. While physical supply can be managed with contracts, storage and supply diversification, the same is true for prices and costs, regardless of fundamental market conditions. In the case of market prices in the future, it is best to be prepared for the worst case scenario or assume that your forecast may be dead wrong. If the 50:50 bet doesn’t go your way, you should have protection in place or have a plan of action at the ready.

Market Trends

‘Fundamental data, market research and forecasts

come at a significant cost. A small business can

easily spend $250,000 a year on subscriptions for data and research while larger businesses can

spend into the millions. Add to that the in-house analysts or economists who have to read and

decipher the reports and the numbers start to really

add up’

Do the fundamental things apply?


Fuel Procurement

Susan Lowe, from DLA Energy Public Affairs,

gives a status report on the US Government fuel

card programme

The Defense Logistics Agency (DLA) Energy is a primary level field activity of DLA and is the

Agency’s fuel provider. DLA Energy provides the Department of Defense (DoD) and other government agencies with comprehensive energy solutions in the most effective and efficient manner possible. The field activity provides a host of ground, marine and aviation fuels as well as space and missile propellants, chemicals and gases, utility fuels and electricity. In addition, DLA Energy is DoD’s centre of expertise for alternative fuels and renewable energy and serves as the executive agent for DoD’s bulk petroleum supply chain.

‘A mission this big has required the organisation to implement innovative methods to ensure customers’ needs, especially those of the warfighter, are met while guaranteeing mission success,’ said DLA Energy Deputy Commander Pat Dulin.

To that end, in the mid-1990s, DLA Energy implemented Fuel Card programmes for the purchase of ground and aviation fuel, and in 2005 the Fuel Card programme expanded to include marine fuel. The purpose of the Fuel Cards is to assist customers with making purchases when a suitable contract is not in place, when a merchant is unable to supply fuel against an existing contract or a new location is established and not yet under contract. The Fuel Card office implements, manages and improves fuel purchases for the warfighters and other customers.

Currently, DLA Energy manages an Aviation Into-plane Reimbursement (AIR) Card programme, which is used at commercial airports worldwide to pay for into-plane refueling. DLA Energy also manages the DoD Fleet Card for customers to purchase ground fuel and vehicle maintenance for DoD-owned or leased vehicles. The DoD Fleet Card is used at commercial service stations and repair facilities.

Along with the AIR Card and DoD Fleet Card, DLA Energy offers the Ships’ bunkers Easy Acquisition (SEA) Card, which is the newest government fuel card offered by the field activity. This state-of-the art fuel programme provides a sophisticated, yet easy-to-use, secure Internet-based solution to marine fuel procurement challenges. The SEA Card Order Management System, known as DoD-SCOMS, is an electronic order, receipt and invoice system that allows military services, the US Coast Guard (USCG) and authorised federal agency vessels to purchase fuel from commercial ship refueling merchants at more than 2,300

ports worldwide. Fuel orders are directly placed with DLA Energy bunker contracted suppliers, or if a port does not have a bunker contract in place, the vessel can place an order through a competitive quote open market ‘spot buy’ process.

The SEA Card programme celebrated its fifth anniversary in October 2010 – at which point it had racked up the purchase of over $860 million dollars’ worth of marine fuel and more than 7,000 transactions.

Using the SEA Card to order fuel is quick, easy and efficient, according to Ordering Officer Chief Logistics Specialist Louis Wade of the USS Rodney M. Davis.

‘It’s a great system,’ said Wade, ‘Basically, I send an email ordering the amount of fuel I need, when I need it and where it is to be delivered – it’s that simple. When our oil frigate gets to its destination, the fuel is there.’

Davis has been the ordering officer for about the last 18 months and has always used the SEA Card. ‘This is the only way I’ve had to order fuel. I understand it was much more difficult before we used the SEA Card, with a lot more paperwork involved,’ he added.

The SEA Card programme was initiated not only to make fuel procurement and the resulting payment process more efficient for both vessels and merchants, but also to decrease administrative costs for the government.

‘Stewardship excellence is a fundamental principle at DLA Energy and when using the SEA Card system, customers can order and pay for fuel electronically, thereby eliminating paperwork, decreasing administrative costs and ensuring accuracy,’ commented Ann Sielaty, the DLA Energy Fuel Card Program Office Director. Sielaty added that the SEA Card is such a valuable tool to her customers because it offers them worldwide coverage as well as a virtual dispute resolution tool.

Winning cards

Susan Lowe is with the Defense Logistics Agency (DLA) Energy Public Affairs team.Headquartered in Fort Belvoir, Virginia, DLA is America’s combat logistics support agency. It provides worldwide support to warfighters and other customers and is responsible for sourcing and providing nearly every consumable item used by the US military forces worldwide.

Contact: Defense Logistics Agency Energy Web: www.energy.dla.mil

‘The purpose of the fuel cards is to assist

customers with making purchases when a suitable

contract is not in place, when a merchant is unable to supply fuel against an

existing contract or a new location is established and

not yet under contract’


service component programme managers were recognised for making the acquisition system more efficient, responsive and timely while demonstrating a consistent pattern of warfighter support, fiscal stewardship and proactive action. The Deputy Undersecretary of Defense for Acquisition and Technology James Finley congratulated the team for finding innovative ways to work with industry and for managing their projects in ways that expand the talents of their people and stretch the purchasing power of scarce dollars.

‘DLA Energy realises it is imperative not only to provide the most comprehensive energy solutions to the warfighter but also to be good stewards of taxpayers’ money,’ said Dulin. ‘That can be quite a challenge, but with successful programmes like the SEA Card, AIR Card and DoD Fleet Card available for our customers and the warfighter to utilise, we are able to meet those challenges head on.’

Dulin added that the warfighters can count on having the fuel they need for a successful mission in part because of DLA Energy’s fuel card programme. ‘These programmes allow our customers to use DLA’s most visible purchasing tools, which are recognised and accepted worldwide,’ he explained. ‘This allows us to directly and positively impact our support to the warfighter.’

Fuel Procurement

In order to continue to meet the evolving needs of the warfighter and other customers, DLA Energy has several initiatives underway. One initiative will allow smaller vessels that can’t use DoD-SCOMS to ‘gas and go’, allowing customers to make individual fuel purchases under the Simplified Acquisition Threshold of $150,000. The new programme, known as the Swipe SEA Card, is being piloted with a co-branded charge card and is due out in early 2011, with full rollout expected by October 2011. Recipients of the Swipe SEA Card are expected to include the USCG, Navy, Army Corps of Engineers and Army Reserve.

‘DLA Energy is proud of the successful strides the SEA Card programme has made over the past five years, but we aren’t resting on our laurels. We remain committed to supporting the warfighter and will continue to do what it takes to meet our customer’s energy needs,; said Dulin. ‘The SEA Card programme helps us do just that.’

With more than 1,100 employees that span 34 locations worldwide, DLA Energy ensures warfighters and customers have the necessary fuel and energy support needed to complete missions anywhere on the globe. These employees drive worldwide coordination within both the military and civilian industries to meet service requirements and

manage critical fuel infrastructure. ‘Using the SEA Card really streamlines

our ordering process; we don’t have to worry about finding a vendor or negotiating fuel prices. And since our mission changes so often and with very little warning we have the flexibility to change our fuel order without risking mission failure,’ said Davis. ‘It’s great to have a system that works so well and to work with people who are so interested in helping us succeed.’

The measurable success of the SEA Card programme contributed to DLA Energy’s 2007 David Packard Excellence in Acquisition Award. The Government Fuel Card Team, contracting personnel, and our

‘The SEA Card programme celebrated its fifth

anniversary in October 2010 – at which point it had

racked up the purchase of over $860 million

dollars’ worth of marine fuel and more than 7,000

transactions’

The SEA Card programme launched in a ribbon-cutting ceremony on 6 October 2005 in Norfolk, Virginia, involving these three vessels, the USS Flickertail State, USS Cornhusker State and USS Gopher State. It initiated the system that would allow military services, the US Coast Guard and authorised federal agency vessels to purchase fuel from commercial ship refueling merchants. (Photo courtesy of DLA Energy Government Fuel Card Program Office.)

0706 bunkerspot v6i6.indd 15 02/12/2009 16:05


Major oil consumers are feeling more

optimistic and confident about

hedging tools, argues Global Risk

Management’s Morten Henriksen

In the past year, Global Risk Management has experienced a steady increase in inquiries for

hedging tools from the bunker market – and the record volume of bunker sales in Singapore over the past year has also affected Global’s Singapore branch.

Many of the major shipowners and suppliers represented in Singapore have come to realise that hedging of the fuel price risk can create a competitive advantage as well as being a way to secure the budget.

Learning from experienceWe see that clients are increasingly hedging their fuel exposure again. Many clients were hit by the extreme market fluctuations in 2008 which scared them away from hedging, but they have learned from this experience and are now returning to the hedging tools – for the right reasons.

Liquidity risk – a major issueAt Global Risk Management, we openly display advantages and disadvantages to clients – describing the process and the risks involved. We also address the risk of a short term liquidity drain (collateral/margin calls) when concluding hedging strategies designed to securing long term cash flows on contracts.

We actually have tools to eliminate the liquidity risks and to make predictable cash-flow strategies both in the short and long run – topics which the clients are very focused on.

When a client is very exposed to increasing fuel prices – an example of this would be a shipping company entering into a Contract of Affreightment (COA), where in many cases it is impossible to pass on the increased fuel expenses to the consumers – it makes perfect sense to enter into a fixed price agreement (FPA) in order to eliminate the risk.

Predictable bunker pricesThe advantage for the shipping company is that this arrangement not only provides predictable bunker prices, but also guarantees fuel supply and quality – even in ports where the supply situation can be fragile.

However, it does sometimes happen that we analyse a client’s business and fuel consumption and find that it will be difficult for the client to use any of our traditional hedging tools. In such cases, we develop customised hedging solutions which will suit the exact need of the client.

Spreading the risk – and the credit lineThe trend we have seen lately is that our clients prefer partnerships based on supply contracts where part of the fuel is purchased on FPA and part of the fuel is purchased on a floating Platts formula – and only a minor part is bought on the spot market. The advantages of this strategy include reduced paper work and increased supply security.

Another trend we see in the market is that clients are spreading their business – using more than one counter party. This is primarily done to increase the credit lines, which is another very important factor for many clients. Alongside this trend, many clients are increasingly using more than one hedging tool – both paper hedges and physical hedges like fixed price agreements – thus spreading the risk still further.

With a proper hedging strategy it is possible to avoid the risk of oil price increases as well as protection against inflation, currency exchange rate changes, interest rate changes, etc.

Who can benefit from hedging?Basically, anyone who is exposed to changes in fuel prices can benefit from hedging – but the businesses that – in our experience – benefit the most are ferry companies, container and cruise liners, and other businesses with either longer term contracts, COAs, etc.

Increasing oil prices in 2011?A growing number of analysts are expecting higher oil prices in 2011. Global’s analyst, Thorbjørn Bak Jensen, shares this opinion. The reasons for this include rising inflation and a surge in Chinese distillate demand.

The expected higher oil prices combined with an increasing optimism about the future among the major oil consumers in the world are some of the important reasons for the increasing interest in hedging tools. So, Global Risk Management is confident that the increase in hedging volumes will continue during 2011.

Confidence boostBunker Hedging

Morten Henriksen is the Sales Director in Global Risk Management’s Singapore branch.

Contact: Morten Henriksen Global Risk Management Tel: +65 6438 4409 Email: [email protected] Web: www.global-riskmanagement.com

‘We actually have tools to eliminate the liquidity risks

and to make predictable cash-flow strategies both in the short and long run – topics which the clients are

very focused on’


fluid viscosities – 100 centistokes (cst) to 300 cst – there was a notable under reading of the mass flow rate. Figures 1 and 2 show the performance of a commercially available four inch – or 10 centimetre (cm) – Coriolis flow meter when applied to a low viscosity fluid and high viscosity fluid respectively.

It can be seen from the low viscosity data that the results fall within the manufacturer’s stated performance for the entire test data. However, the high viscosity data displays a growing under-reading at low flow for the majority of the high viscosity test points. The global bunker market is estimated to account for about $200 billion, so a 1% error equates to $2 billion of traded bunker fuel. To understand this phenomenon it is worthwhile plotting the entire data against pipe Reynolds numbers (see Figure 3).

The test data now appears to display a notable trend with decreasing pipe Reynolds numbers. This deterioration suggests that there might be a shift in the calibration factor at low Reynolds numbers. In highly viscous fluids, it is possible to attain low Reynolds numbers with a moderate flow velocity relative to the fluid properties. Thus the effects observed cannot solely be attributed to low fluid velocity.

Research carried out by P. Tschabold, V. Kumar and M. Anklin (presented in a paper at the South East Asia Hydrocarbon Flow Measurement Workshop, February 2010) suggests that the shift in calibration factor is caused by oscillatory shear forces within the flow tubes of the Coriolis device. It is believed that the Reynolds number effect

With the vast sums of money involved in the bunker fuel industry, accurate

measurement is crucial in ensuring any financial exposure is reduced to a minimum. Current measurement practice is to use tank dipping, a traditional method whereby the depth of fuel is measured in every tank on the bunker barge. This measurement can then be used to infer the volume of fuel transferred. However this method has numerous sources of uncertainty such as entrained air, operator error and measurement resolution to name but a few. A further concern is that tank dipping is an offline process which relies on the competency of the operator.

Industry now appears to be favouring a move towards using Coriolis flow meters to provide an online mass flow, density and temperature measurement of the traded bunker fuel. Flow measurement makes the custody transfer process more transparent, and removes any negotiation from the process. While this is a move that TUV NEL and many within the bunkering community support, the issues presented by using Coriolis meters in bunkering applications must be highlighted.

One such issue is the current belief that a Coriolis flow meter can be calibrated in water and then be used to measure bunker fuels with no compensation required. Research carried out on Coriolis flow meters at TUV NEL’s UK National Standards oil flow measurement facility revealed that at high

Christopher Mills of TUV NEL looks at some

of the considerations that arise from using

Coriolis meters for bunkering

Coriolis questionsTechnical Issues

Christopher Mills is a Project Engineer with the independent international technology services organisation, TUV NEL. He is an associate member of the Institution of Chemical Engineers (IChemE) and also a member of the Steering Committee for the UK Oil & Gas Focus Group. TUV NEL is the custodian of the UK’s National Flow Measurement Standards and is at the forefront of high viscosity flow measurement.Under the UK Government’s National Measurement System (NMS), TUV NEL is currently engaged in a measurement research programme addressing a number of flow measurement issues and challenges. TUV NEL is a part of the TÜV SÜD Group, a leading international services organisation.

Contact: Christopher Mills TUV NEL Tel: +44 1355 220222 Email: [email protected] Web: www.tuvnel.com

-1.5

-1.0

-0.5

0.0

0.5

0 10 20 30 40 50 60 70 80

Mas

s Fl

owra

te E

rror

(%)

Reference Flowrate (kg/s)

Kerosene 10°C (3 cSt)Kerosene 20°C (2 cSt)Kerosene 30°C (2 cSt)Kerosene 40°C (2 cSt)

Figure 1: Coriolis Mass Flow Error - Low Viscosity


‘While using Coriolis flow meters for measurement

of bunker fuels is a step in the right direction, further research and development

may be required if an overall uncertainty target of ±0.5% is to be achieved

for the trading of bunker fuels’

shown shown in Figure 3 is caused by the interaction between oscillating Coriolis forces and oscillating shear forces. The oscillating shear forces are found to be far more dominant than the oscillating Coriolis forces in low Reynolds number flow than in high Reynolds number flow. However, it is possible for manufacturers to apply an online compensation for this effect using on board signal processing within the Coriolis device.

Another important issue is the performance of Coriolis meters in two phase

flow. Due to the highly viscous nature of bunker fuel oils, gas entrainment is a serious consideration in terms of flow measurement. It is already known that gas can become entrained in flowing viscous liquids during the transfer process. It is believed that this has the potential to lead to substantial mis-measurement of the quantity of fuel traded. TUV NEL will be presenting on this subject at the 10th South East Asia Hydrocarbon Flow Measurement Workshop in Kuala Lumpur, Malaysia in March 2011.

Technical Issues

-1.5

-1.0

-0.5

0.0

0.5

100 1000 10000 100000 1000000

Mas

s Fl

owra

te E

rror

(%)

Pipe Reynolds Number

Kerosene 10°C (3 cSt)Kerosene 20°C (2 cSt)Kerosene 30°C (2 cSt)Kerosene 40°C (2 cSt)Primol 10°C (300 cSt)Primol 20°C (175 cSt)Primol 30°C (80 cSt)Primol 40°C (50 cSt)

Figure 3: Coriolis Mass Flow Error - Pipe Reynolds Number

-1.5

-1.0

-0.5

0.0

0.5

0 10 20 30 40 50 60 70 80

Mas

s Fl

owra

te E

rror

(%)

Reference Flowrate (kg/s)

Primol 10°C (300 cSt)Primol 20°C (175 cSt)Primol 30°C (80 cSt)Primol 40°C (50 cSt)

Figure 2: Coriolis Mass Flow Error - High Viscosity


also the effects of gas entrainment. TUV NEL’s experience in this area

has been built up through years of UK Government-funded research into high viscosity flow measurement. As part of the TUV NEL high viscosity fluids Joint Industry Project, a selection of established flow metering technologies (including Coriolis, Venturi and ultrasonic devices) were evaluated across a Reynolds number range of 200 – 100,000 at kinematic viscosities of 20 cst, 100 cst, 175 cst, 300 cst and 500 cst. A second stage of test work researching gas entrainment was completed at a kinematic viscosity of 500 cst and with a Gas Void Fraction (GVF) range of 0% - 5%. The findings have raised some extremely interesting questions about flow measurement of high viscosity fluids – questions that should be of interest to many within the bunker fuel industry.

While using Coriolis flow meters for measurement of bunker fuels is a step in the right direction, further research and development may be required if an overall uncertainty target of ±0.5% is to be achieved for the trading of bunker fuels. To minimise some of the effects mentioned in this article, it is advisable that Coriolis meters undergo calibration in the low Reynolds number range using high viscosity fluids prior to installation.

With this in mind, TUV NEL, supported by the UK Government’s National Measurement System, is currently upgrading the UK National Standards oil flow measurement facility to handle fluid viscosities from 2 cst up to 1,500 cst at flow rates up to 150 litres per second. TUV NEL can therefore reproduce the conditions currently experienced in the bunker fuel industry. This includes the loading/unloading batch transfer process, extreme viscosities and

Technical Issues

‘TUV NEL can reproduce the conditions currently

experienced in the bunker fuel industry. This includes

the loading/unloading batch transfer process, extreme viscosities and

also the effects of gas entrainment’


Jon Moreau of Jiskoot looks at recent advances

in in-line blending technology for the bunker

market

With the International Bunker Industry Association (IBIA) soon to publish its first

technical guidance note, which will cover in-line blending, the subject is of heightened interest in the bunker market. This article summarises some of the advances that have been made in blending technology and the market changes that are driving them.

The goal of any bunker blending process is to blend two or more products – typically heavy fuel oil (HFO), intermediate fuel oil (IFO), marine diesel oil (MDO) or marine gasoil (MGO) etc. – to produce a finished fuel that complies with the International Organization for Standardization’s ISO 8217 and any other requirements, such as the International Maritime Organization’s (IMO) MARPOL. The blended fuel must be homogenous, which means well mixed and of consistent quality for the whole batch. Ideally, it should be produced at the lowest cost using the minimum justifiable plant.

Bunker prices have remained robust over the last 18 months, despite a decline in other sectors. This, combined with the increasing pressure on physical suppliers to measure and certify the quality and quantity of fuel to meet the requirements of the Emission Control Areas (ECAs), MARPOL Annex IV and the recently revised ISO specification, is changing the way that suppliers plan their infrastructure and operations.

Most bunker fuel is blended at some

point within the process from the distillation unit to the point of delivery. Recently, highly accurate, reliable and high performance in-line blending technology has become available at much lower costs. This has resulted in its being used further and further down the supply chain and a large number of major bunker projects have adopted this approach because of the significant return on investment that it provides. The cost of an in-line blender is often not much higher than that of the storage tanks required for traditional in-tank blending. However, when the flexibility and reduction in inventory provided by an in-line blender are combined

Advancing in-lineBunker Blending

Jon Moreau is Director, Business Development for Jiskoot Quality Systems, Cameron’s measurement systems division.

Tel: +44 1892 518000 Email: [email protected] Web: www.c-a-m.com/jiskoot

‘Highly accurate, reliable and high performance in-line

blending technology has become available at much

lower costs. This has resulted in its being used further and

further down the supply chain and a large number of major

bunker projects have adopted this approach because of the significant return on

investment that it provides’


with the savings it provides from enhanced blend accuracy, the returns are significant. Typically, a 20,000 tonnes per annum (TPA) operation sees a return-on-investment in under a year and achieves savings of between $8 and $14 a tonne of blended fuel.

Bunker quality is of vital importance and ISO 8217 requires that fuels are homogenous. The blended constituents must be well mixed and the blend must have the same quality and properties throughout the batch. This creates two challenges that must be solved.

The first is that of mixing. How much energy is needed to mix all the possible components? Depending on the operating conditions, in-line blenders use either static or power mixing systems to ensure that the blended products are well mixed. It is important to note that there is no blending technology that can resolve blend incompatibility.

The second challenge is that of layering, normally in the HFO tank. Layering means that the quality of the residual oil can change during the blending process. If this is not corrected, by an in-line blender, the blend quality will change during the batch (i.e. it will not be homogenous). This is likely to result in ‘give-away’ to ensure compliance to specifications. In-line blending systems now enable the accurate use of on-line analysers to measure the quality of the final batch in real-time and to dynamically adjust the batch ratio to correct the quality to compensate for the layering in tanks. The analysis parameters for which demand is highest are viscosity, density and sulphur, with a number of others also being used.

The adoption of on-line analysers as an integral component of in-line blending in the bunker market has increased over the last 5-10 years as the technology has become proven. High performance in-line blenders are now no more complex to use than a mobile phone and are available with integrated on-line analysers to ensure batch quality. This is achieved using proven control algorithms, previously only used in process plants or refineries. These simple-to-use systems optimise the blend to quality parameters at reference conditions (such as 50°C for viscosity, density at 15°C, etc.). This ensures that no external calculations need to be performed once the batch is complete to certify the quality.

There has been a lot of recent discussion in the industry about the use of flow meters (such as Coriolis, ultrasonic, positive displacement, etc.) for the accurate measurement of bunker deliveries. In-line blending systems use flow meters (and flow control) to achieve the required blend. As a result, the incorporation of a client’s preferred flow meter technology within a blender is extremely simple. This removes the need for additional dedicated batch flow meters as those within the blender can be used to provide accurate batch quantity measurement. Blender control systems automatically use the data from these meters to provide fully temperature/volume-corrected measurements in accordance with the American Petroleum Institute (API) and Institute of Petroleum (IP) measurement standards for batch quantity certificates. These can be either in volume or mass, depending on the client’s requirements.

Bunker batch quality certification is already a requirement in a number of markets and, as ECAs spread, it is expected that this will become increasingly more prolific internationally. Depending on the blender configuration, advanced in-line blenders are now capable of providing a range of automated batch certification.

Automatic batch quality certificates do not remove the need for a representative sample to verify a bunker delivery note

Bunker Blending

(BDN) or quality certificate. It is now

becoming normal practice for a segregated automatic

MARPOL compliant sampler to be included within an in-line blending package and for the blender control system to fully automate both the sampling process and the verification of sample integrity.

As the number of bunker suppliers who have benefited from the savings that this technology can deliver increases, more are planning to deploy in-line blending systems. These are increasingly designed to meet their current needs as well as accommodate the use of a much wider range of heavy fuel and cutter stocks to meet future market demands. What is evident is that in-line blending will play a more prominent role in meeting the needs of physical bunker suppliers to deliver a range of bunkers from a wide and ever-changing range of feedstock. In the future, those suppliers who embrace the use of the latest technology to produce a bunker fuel that meets specification at the lowest cost with the highest flexibility will dominate the market.

‘The adoption of on-line analysers as an integral component of in-line blending in the bunker market has increased over the last 5-10 years as the technology has become proven’


Chris Daw of Kittiwake Procal explains the growing importance

and benefits of in-situ continuous emissions monitoring in ensuring

transparent environmental data, regulatory

compliance and improved operational performance

Reducing shipping emissions will be the major driver of change in the maritime industry for

decades to come. But the starting point for tackling shipping emissions is to measure it. The analogy is simple; you don’t start a diet without accurate scales to measure your progress! Real-time emissions measurement is not only critical in ensuring regulatory compliance, but also for improving the operational performance of the modern ship.

Following the recent United Nations (UN) Climate Change Summit in Cancun, Mexico, yet more attention has been focused on greenhouse gas emissions (GHG) from global shipping. As a result of Cancun, the International Maritime Organization (IMO) still holds the reins of regulating shipping’s GHGs, just as it does with sulphur oxide (SOx) and nitrogen oxide (NOx). Understandably, shipping’s regulators at the IMO want to remain in charge of their own destiny, but let’s be clear; tighter regulation of carbon dioxide (CO2) emissions from shipping is undoubtedly on the way.

However, innovative shipowners and operators are not waiting for regulators to tell them what to do. The emergence of emissions benchmarking and vessel efficiency tools – such as shippingefficiency.org from the Carbon War Room, the Environmental Ship Index (ESI) from the World Ports Climate Initiative (WPCI) or the Swedish-led Clean Shipping Index – shows that shipping innovators are aware that charterers see a value in vessel efficiency. The likes of Caterpillar, Volvo and Wal-Mart are now asking for emissions data and Maersk Line has become the first shipping line to publish independently verified CO2 emissions data, vessel by vessel.

So, emissions monitoring is already a fact of life for the shipping industry. The IMO’s MARPOL Annex VI’s well-established regulations for the prevention of air pollution from ships have made emissions monitoring an essential data tool. Particulate matter (PM) emissions from shipping may also soon need to be monitored. This means that the commercial incentives to monitor emissions and the regulatory requirement to manage

emissions are here today. What is more, the commercial and operational benefits of getting it right are substantial.

At a regional level, the North Sea, English Channel and Baltic Sea Emission Control Areas (ECAs) will see sulphur content limits reduced from 1.0% to just 0.1% in 2015. Since 2010, vessels have had to comply with the European Commission (EC) Regulation 2005/33/EC when in European Union (EU) ports, which – apart from a few exceptions – requires the use of 0.1% sulphur fuel or equivalent emissions.

More ECAs are also on the way. A vast US-Canadian ECA will take effect from July 2012 and a US-Caribbean ECA was recently approved by the IMO. Japan is also reported to be preparing an ECA application for submission in the next one to two years. As a result, vessels operating in these areas need to monitor and report their emissions in order to demonstrate compliance. What is more, the reduction to 0.1% sulphur content will require even more sophisticated monitoring systems that are capable of producing accurate, verifiable emissions data.

When it comes to meeting emissions limits through lower sulphur bunker fuel, the testing agency simply takes a sample of the fuel as it is pumped onto a vessel. Compliance with ECA regulations is therefore straightforward. However, accurately assessing SOx or NOx levels when a vessel is fitted with a scrubber or a selective catalytic reduction (SCR) unit is not as straightforward.

The most effective method for measuring emissions is through in-situ monitoring using

Environmental Issues

Chris Daw is the Managing Director of Kittiwake Procal, a manufacturer of in-situ multi component continuous emissions monitoring systems (CEMS).

Contact: Chris Daw Tel: +44 1733 232 495 Web: www.procal.com

‘A vast US-Canadian ECA will take effect from July 2012 and a US-Caribbean

ECA was recently approved by the IMO. Japan is also reported to be preparing an ECA application for submission in the next

one to two years’

To measure is to know

‘The day-to-day benefits of continuous emissions monitoring mean that emissions data gathered can be used to advise on

engine and systems performance’


a continuous emissions monitoring (CEM) system. In contrast to extractive sampling, where an exhaust gas sample needs to be physically extracted from the system and then analysed, in-situ emissions monitoring provides a continuous, real time measurement of the content of your exhaust gases – with data provided instantaneously on a screen that can be installed in the engine and on the bridge.

As opposed to in-situ continuous monitoring systems, which immediately flag up any problems, a five-stack extractive system will monitor any stack for only 12 minutes in any hour. In-situ systems are also more reliable, as they do not require any filtration or drying of the exhaust gas, and are the only real monitoring option for low maintenance seawater scrubbing operations.

In short, CEM systems are a robust and reliable method of complying with maritime emissions regulations, whether in port, in ECAs or in international waters. They are highly effective, simple to use, require little maintenance and have lower installation and operational costs compared to extractive sample handling systems. They can also measure compliance from both residual and distillate fuel combustion, which enables fuel switching to be monitored.

Infra-red in-situ systems are sensitive enough to confirm compliance, even when emission limits are very low. Emissions that are the equivalent of 0.1% sulphur fuel are around 22 parts per million (ppm) of SOx in the exhaust gas. Any instrument with a range over 0-100 ppm will not be accurate enough to measure this and an inappropriate choice for scrubber operational monitoring. For example, Kittiwake’s Procal 2000 – an infra-red (IR), duct or stack-mounted system, designed to provide in-stack analysis – has a sulphur dioxide (SO2) monitoring range of

0-100 ppm but can automatically switch ranges to 0-500/1000 ppm for monitoring operations outside an ECA on high sulphur fuels.

Such systems are also versatile enough to measure several gases and from several onboard locations. Kittiwake’s Procal 2000 can analyse up to six different exhaust gases from multiple engines and boilers, including SO2, CO2 and NOx. It comprises up to six exhaust-mounted analysers, each with automatic verification facilities, which makes it ideal for a crew lacking experience in emissions analysis. The Procal 2000 analyser has an in-situ sample cell that sits inside the exhaust, avoiding the need to manually extract gas using costly, high maintenance sample handling systems, and enabling analysis of an unmodified, representative gas sample.

Kittiwake’s Procal 2000 can also measure water (H2O) or water vapour, which means that measurements can be reported in as ‘dry’ or ‘wet’, another key advantage over many extractive alternatives.

As well as meeting regulatory standards, emissions monitoring performs a valuable operational and commercial role. Armed with accurate data about the emissions of its vessels, an operator can optimise operational efficiency within those regulatory limits; in other words, avoiding the risk of gold-plating your level of compliance, possibly to your commercial disadvantage.

Accurate emissions data will also allow an operator to baseline the existing combustion systems on its vessels and then benchmark the performance and value for money of emission reduction products and technologies, such as lower sulphur fuels or scrubbing equipment, as well as evaluating compliance against published specifications.

The day-to-day benefits of continuous emissions monitoring mean that emissions data gathered can be used to advise on engine and systems performance. This in turn can be used to improve maintenance regimes that better understand engine and generators’ specific emissions tolerances and provide an early warning of equipment damage or failure.

When it comes to controlling your emissions, knowledge and transparency are power. The better information you have, the better decisions you can take, not just in ensuring regulatory compliance and avoiding the costs of emission breaches, but also in maximising operational efficiency and making the right strategic calls on new technology investments. In reaping those benefits, in-situ CEM systems will ensure that emissions are accurately measured and reduced.


‘In-situ emissions monitoring provides a continuous, real time measurement of the

content of your exhaust gases – with data

provided instantaneously on a screen that can be

installed in the engine and on the bridge’

‘When it comes to controlling your

emissions, knowledge and transparency are power. The better information you have, the better decisions you can

take, not just in ensuring regulatory compliance

and avoiding the costs of emission breaches, but also in maximising operational

efficiency’

To measure is to know


As the maritime industry becomes increasingly

aware of the importance of eco-safety, JLMD

Ecologic Group discusses the development of its

Fast Oil Recovery System

The principle of Corporate Social Responsibility (CSR) is gaining recognition from an increasing

number of shipping companies and is also being considered by the International Maritime Organization (IMO). The organisation’s development of new ship construction standards will see the setting of new goals for safety and environmental protection. The ongoing work in this area marks a major change in the global maritime approach to safety regulation, and marks a fundamental shift towards a risk-orientated approach.

In this context, accidental pollution becomes a significant environmental issue, and technical solutions to this problem will be expected to satisfy the demands of all players in the shipping industry.

A newly created association, the Maritime Passive Safety (MPS) Association, will bring together international expertise to give advice on vessel equipment and processes which can mitigate the consequences of accidental oil pollution.

Passive safety experts have identified problems with current ship design when pollutant recovery operations have to be performed. Whilst ship designers have made great progress in eco-efficiency, such as reducing nitrogen oxide (NOx) and sulphur oxide (SOx) emissions, and using water ballast treatment and anti-fouling technologies, these measures do not necessarily make such ships eco-safe.

The idea of eco-safety has been a key issue for JLMD Ecologic during 10 years of analysis driven by a risk-based approach. The France-based engineering company is one the main founders of the MPS association, and its Fast Oil Recovery (FOR) System is a key

item of a vessel’s post-accident equipment. FOR Systems are onboard emergency

pollutant recovery devices for cargo and bunker tanks. Each tank is permanently equipped with a minimum of two security circuits that can be easily accessed via dedicated connectors located on the ship’s upper deck. The FOR System allows a salvage team to connect two hoses and evacuate the potentially polluting cargo from a vessel. Sea water is injected by the salvage team, and the system then uses the Archimedes buoyancy principle (in that the oil is lighter than water) and the fuel is then propelled upwards for complete recovery via the other circuit. The FOR System allows bunker fuel to be rapidly recovered, without the use of any kind of liquid pollutant, and therefore limits the environmental consequences should there be an accident at sea.

‘FOR Systems were born from an alarming statement that 20,000 ships permanently circulate on our seas…without any access on board to easily and rapidly empty the cargo and bunker tanks in case of accident,’ says the JLMD Ecology Group.

‘The FOR Systems end complex and slow salvage processes by offering all-time, quick and standardised access to the cargo and bunker tanks for the salvage teams.’

Recovery positionEnvironmental Issues

Gilles Longuève JLMD Ecologic Group Tel: +33 1 43 12 59 02 Email: [email protected] Web: www.jlmdsystem.com www.maritimepassivesafety.com

‘Passive safety experts have identified problems with current ship design when pollutant recovery

operations have to be performed’

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explained: ‘With the FOR System, JLMD is answering a need that is growing within the shipping industry for efficient post-accident technologies. Our teams have worked together with JLMD in order to perfectly adapt the system to the container ships’ bunker tanks.

‘This technological innovation is totally in line with CMA-CGM’s environmental strategy. It is now onboard all our new vessels.’

The system has now been issued with a new class notation by certification agency Bureau Veritas, and it has been supported by the Centre of Documentation, Research and Experimentation on Accidental Water Pollution (CEDRE).

‘Ten years of research and development have been necessary for JLMD to develop the appropriate know-how now in compliance with the Bureau Veritas FOR System notation,’ said Gilles Longuève, director of JLMD Ecologic Group.

‘The new FOR System label granted by the certification agency confirms the efficiency and great potential of our technology. We have made sure we offer an effective, simple, tailor-made and immediately available solution for all maritime transportation players who wish to demonstrate their commitment to the environment.’

To date, 35 vessels have been equipped with FOR Systems, and JLMD Ecologic Group is looking to install the system on at least 10% of the global maritime fleet by 2015.

CMA CGM is the first container ship company to install the FOR System on its vessels; firstly, on a 13,300 twenty foot equivalent unit (TEU) vessel and then on a series of 8,500 TEU and 11,400 TEU vessels built in South Korea.

CMA CGM then participated in the analysis of the equipment, which resulted in JLMD taking steps to improve bunker tank piping as weaknesses in common piping interconnections (with relation to venting and overflows) could disrupt the recovery process and force salvage companies to drill through the deck or the hull to access each tank.

MARPOL Annex IV regulations have made great progress in moving tanks away from the vessel’s hull, but, as a result, access to tanks in the event of an emergency has been made more complex. Also, many other incidents, such as valve or pipe failures or off-specification oil, can require time-consuming procedures to correct. Even small malfunctions can require discharge and loading operations which can take hours, or even days, to complete.

To install the FOR System, JLMD partially re-engineered the existing piping diagram of CMA CGM vessels which significantly improved the accessibility of the bunker tanks. Each incident or accident now has a proper recovery process which is in compliance with the FOR System installed, and this contributes to the vessels eco-safety.

As Ludovic Gerard, director of fleet and new construction for CMA CGM,


‘The FOR System allows bunker fuel to be rapidly recovered, without the use of any kind of liquid pollutant’


Don Gregory of the EGCSA predicts

what might be the hot environmental topics

of 2011

Although 2008 seems a distant memory, the economic crash – which can be likened to a

modern automobile collision, where an air bag softens the impact and saves the occupants – continues to echo with hard-to-predict outcomes.

For air bags, read the money that was printed to re-inflate economies, fill the empty coffers of banks and prop up confidence. Many major shipping names took drastic measures to cut costs. Others somehow persuaded their shareholders to cough up more money. Despite the worries at the time, most suppliers got paid and it seems that real pain (bankruptcy) was avoided. But has the air bag-softened crash facilitated a re-think of shipping strategy, the market and behaviours? Or is it back to business and boom times?

In the UK, a change of government with stringent budget deficit cutting plans has not yet impacted on the average citizen. But this is likely to change dramatically in 2011 as budget cuts bite, and energy and food costs continue to rise with unemployment hitting more of the population. The situation is by no means limited to the UK; we will witness tough times across Europe. Will this impact external transport needs? Will the reduction in demand affect some of the marine trades?

For the Exhaust Gas Cleaning Systems Association’s (EGCSA) members, the big question is when and what will cause the shipping industry to identify that it is facing a massive legislative collision in 2015? EGCSA members are frustrated to see almost monthly reports of shipowners, charterers, shippers, technologists, classification societies and others with reasons to postpone or diminish the value to be gained from tighter air emissions limits. With EGCSA members’ exhaust gas cleaning systems at sea and in operation ranging in size from 500 kilowatts (kW) to 21,000 kW, the evidence is there to support the claim that technology is available. The alternative choice is to select a low sulphur diesel fuel. But at an additional $500 a tonne fuel cost for a 0.1% sulphur diesel, this option is prohibitive for a significant sector of the shipping industry that will be frequenting Emission Control Areas (ECAs) in 2015.

What does the EGCSA forecast will change in 2011? All EGCSA members will have working exhaust gas cleaning systems on board ocean-going vessels. The tangibility of exhaust gas cleaning systems will be real. There will be more real operating data gathered to confirm that these technologies are not only beneficial financially, but they also have no significant impact on the environment. This

will all be supported by EGCSA workshops throughout the world to ensure that decision makers in the shipping industry have the facts about the options available. Denial will no longer be an option.

Despite the good intentions to promote the sales of large gas reserves, liquefied natural gas (LNG) will remain a niche fuel of choice with less than 1% of installed power on new builds selecting LNG or liquefied petroleum gas (LPG). On the other hand, we will see new fuel blends and new fuel types appearing in test programmes. The Quadrise tests with AP Moller Maersk (APMM) on an invert emulsion fuel will enable future fuels to avoid expensive cutter stocks which are usually the source of many quality complaints. It is unlikely that vegetable oils will see a take-up due to their high cost. On the other hand, there are likely to be increasing amounts of road fuel bio derivatives accidently finding their way into marine fuels. Work is being done to develop pyrolysis fuels, a method of converting cellulosic solid land fill into a liquid marine fuel. These changes are in some cases happening so rapidly that the International Organization for Standardization’s (ISO) Working Group on marine fuels has agreed to work on the next revision of the fuel standard in attempt to provide some guidance to marine fuel buyers.

Why are we seeing this interest in the development of marine fuels, and the testing of new products in particular? Some might argue that it can provide a reduced carbon dioxide (CO2) footprint. Although in some cases there will be a reduced CO2 footprint from the new fuels, the overriding driver is reducing the cost of energy and retaining the ability for the world to enjoy low cost maritime transport in a world of rising energy costs. It begs the question, why are ship-owners ignoring the savings to be had from fitting exhaust gas cleaning technologies?

Reality bitesEnvironmental Issues

Don Gregory is the Director of the Exhaust Gas Cleaning Systems Association (EGCSA) and has spent several years involved with the development of coherent solutions for the maritime industry’s contribution to improving air quality.

Contact: Don Gregory EGCSA Tel: +44 1784 481 151 Email: [email protected] Web: www.egcsa.com

‘These changes are in some cases happening

so rapidly that the ISO Working Group on marine fuels has

agreed to work on the next revision of the fuel standard in attempt to

provide some guidance to marine fuel buyers’


Navin Perera of GAC Bunker Fuels

looks forward to new developments in Sri

Lanka’s bunker market

After so many years of being hailed as one of the places that could be the next big thing in bunkering,

Sri Lanka is beginning to look ready to live up to its billing.

Sri Lanka has never lacked for potential bunker demand. With its strategic position on the key trade lanes of the Indian Ocean, more than 200 ships pass the country’s southern tip daily.

When the planned expansion of Colombo’s South Port and the opening of Hambantota are completed, even more ships will be looking to take on fuel.

The liberalisation of Sri Lanka’s market has been a long process, with many twists and turns since the privatisation of Lanka Marine Services (LMS) back in 2002. However, there is a feeling among the local bunkering community that the door that we have been pushing against is being opened, and we can look forward to more involvement from the private sector in both Colombo and the new port of Hambantota, which was officially opened in November 2010.

At a recent meeting of the Association of Licensed Bunker Operators of Sri Lanka (ALBOS), it was noted that three new licence holders had entered the market. The new entrants – Mc Marine Pvt Ltd, Thalina Shipping Ltd, and Maria Shipping – have not yet been allocated storage capacity at the Colombo oil terminal, but they are all pushing to get space at Hambantota.

As Bunkerspot has pointed out in previous articles, Sri Lanka’s bunker market has been held back by the lack of available storage space and discharging facilities at the port of Colombo (see Bunkerspot, April/May 2009, page 56). Consequently, each bunker licence holder is only entitled to enough space for about 3,700 metric tonnes (mt) of fuel, which they have to use for all their 380 centistoke (cst) and 180 cst fuel oil and marine gasoil (MGO) needs.

The Colombo terminal is set to have another storage tank, with capacity for about

5,000 mt of fuel, and plans are also afoot to introduce 500 cst fuel oil to the market. These will be welcome developments, but they will not be enough to cater for all the potential demand that could be coming Sri Lanka’s way.

This is why Hambantota is such an attractive prospect. The port will have a tank farm with capacity for 100,000 mt of bunker fuel and, not surprisingly, all Sri Lanka’s bunker players are making every effort to get involved.

For the moment, however, the Sri Lanka Ports Authority (SLPA) seems keen to run the show itself. The SLPA’s Chairman, Dr Priyath Wickrama, recently revealed that the Authority was looking to buy four barges so it would be ready to start bunkering operations in May.

The licensed bunker operators are continuing to press their case for opening up the port’s bunkering, arguing that the huge potential of Hambantota can best be unlocked by introducing a more competitive edge to the market.

Introducing more competition was what the government said it was trying to do when it privatised LMS by selling to John Keels Holdings for $12.5 million and also gave bunkering licences to other operators. As Bunkerspot readers will be aware, this sparked off a long-running legal battle which eventually ended with Lanka Marine Services (John Keels Holdings) relinquishing control of the Colombo oil terminal to JCT Co. Ltd, a subsidiary of SLPA, and – as we mentioned above – each of the licensed suppliers having an equal allocation of the available storage.

While Sri Lanka’s bunkering community

Spotlight on Sri Lanka

Navin Perera is a bunker broker with GAC Bunker Fuels, Sri Lanka.

Contact: Navin Perera Tel: +94 11 479 7900 Mobile: +94 777 77 6568 Fax: +94 11 479 7910 Email: [email protected] Web: www.gac.com

‘Sri Lanka has never lacked for potential bunker demand. With its strategic position on the key trade lanes of the Indian Ocean, more than 200 ships pass the country’s southern tip daily. When the planned expansion of Colombo’s South Port and the opening of Hambantota are completed, even more

ships will be looking to take on fuel’

Open for business?‘The Colombo terminal is

set to have another storage tank, with capacity for about 5,000 mt of fuel’


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is hoping that Hambantota will bring a major boost to the market, Colombo and the other ports have already seen an increase in volumes in recent years. The total volume in the Sri Lankan bunker market is typically between 32,000 mt and 35,000 mt a month. The 380 cst grade of fuel oil accounts for more than half of this, with 180 cst fuel oil and MGO accounting for about 20% and 28% respectively.

Licensed bunker operatorsWith the recent announcement of the new entrants to the market, there are now 11 licensed bunker operators in Sri Lanka. In addition to the new entrants and LMS, the list features: Lanka Bunkering Services Ltd and Lanka Maritime Services Ltd (LMSL), which are both connected to Sri Lanka Shipping); Ceylon Petroleum Corp. (CPC); Mocetti International Pvt. Ltd (part of the Hayleys group); Lanka Indian

Oil Company (an Indian Oil Company subsidiary), Inter Ocean Energy Pvt. Ld (part of the McLarens Group) and CSC Kandia (a joint venture between Ceylon Shipping Corp. and Ariston Oil and Shipping Company Pvt. Ltd).

Inter Ocean Energy, LMS and LMSL have their own barges, while the other operators currently operate with chartered vessels.

Future prospectsWhile debate may continue over the role of the SLPA at Hambantota, there is no doubt that the new port has the potential to transform the local bunker market. The government has ‘fast tracked’ the project and the authorities have been open to new ideas – such as offering special tariff rates – that can kick start the port’s fledgling bunker market. We believe that encouraging open competition would be the next logical step forward.

Spotlight on Sri Lanka

‘While Sri Lanka’s bunkering community is hoping that Hambantota will bring a major boost to the market, Colombo and the other ports have

already seen an increase in volumes in recent years’


Llewellyn Bankes-Hughes looks at training courses

and books designed to enhance knowledge

levels within the maritime industry

Few would argue that those companies that are prepared to invest most heavily and thoughtfully

in the education and training of their staff will be those that will fare best in the long term. Whether these companies choose to train their staff in-house, send them to third party courses or use a combination of both, anecdotal evidence suggests that the outcome appears to be the same: a higher level of education and understanding among employees, greater staff retention, and – importantly – closer customer contact and better service.

Education and training are ongoing issues – you can never know enough about a subject, and bunkering is no different in this respect. There are already a number of introductory level training courses offered around the world, ranging from the regularly-performed one-day Basic Bunker Course and two-day advanced courses offered by the International Bunker Industry Association (IBIA) to the two-day Piraeus Bunker Course offered by Petrospot and others provided, for example, by Singapore-based Magenta Global and Conference Connection.

May to SeptemberThe most widely respected training course remains the five-day residential Oxford Bunker Course, which has been offered in various incarnations since the early 1980s but, since 2004, has been organised every May and September in Oxford by Petrospot. This course draws students from over 50 countries, with some companies, such as OW Bunkering, BP Marine, TOTAL, Dan-Bunkering and Cockett Marine Oil, sending students to almost every course, and others, including national oil companies, shipping lines, suppliers, traders and brokers, sending all their new staff to the next available Oxford course. The level of expertise offered in Oxford is second to none, although the opportunity for students to question the lecturers for an entire week and to mix within a peer group comprising a wide range of disciplines within bunkering and shipping adds significantly to the learning experience. However, in many cases, once the latest batch

of students return home more educated and experienced – but also exhausted by the incessant networking and socialising – few have been able to continue their educational journey due to a lack of suitably advanced bunker courses.

Now, however, that is about to change. Prompted by past delegates to the Oxford Bunker Course to provide a higher level training option, Petrospot will launch The Oxford Bunker Course (Advanced) in Singapore in April, during Singapore Maritime Week 2011. This three-day intensive course will be a significant progression from the introductory Oxford Bunker Course, designed for students with at least two years’ experience in bunkering who want and need to develop their skills further. Uniquely, the course will integrate the key elements of bunkering, to demonstrate how technical, commercial, operational, legal and environmental issues are all inter-related and in the real world cannot be dealt with in isolation.

The Oxford Bunker Course (Advanced) is led by Nigel Draffin, Technical Director of the original Oxford Bunker Course, who will coordinate a team of local experts charged with tackling very specific and specialist sections of the course.

Nigel Draffin is an established author of books on various aspects of bunkering. His latest book, Commercial Issues in Bunkering, will be published in early 2011 and will complement his previous titles, An

Education and Training

Petrospot publishes Bunkerspot and Cargo Security International magazines and online services, as well as a growing library of books on marine fuels and marine surveying. It also organises a range of training courses, educational seminars and international conferences, including Maritime Week Americas and Oil & Shipping Africa.For more information on Petrospot’s bunker books, see www.petrospot.com/books.

Contact: Llewellyn Bankes-Hughes Managing Director Petrospot Limited Tel: +44 1295 814455 Email: [email protected] Web: www.petrospot.com

‘The opportunity for students to question the

lecturers for an entire week and to mix within a peer group comprising a wide

range of disciplines within bunkering and shipping adds significantly to the

learning experience’

Raising the bar


Introduction to Bunkering, An Introduction to Fuel Analysis and An Introduction to Bunker Operations. However, as w i t h the advanced bunker course, the new title will also mark a progression towards a deeper understanding of this particular aspect of the industry.

Petrospot has already published six bunkering titles, An Introduction to Bunker Credit Risk being the most recent, with Legal Issues in Bunkering and Commercial Issues in Bunkering the next to appear. However, Petrospot is also turning its hand to related industries and has just published Report Writing for Marine Surveyors, a valuable addition to the body of information available to marine surveyors. Written by Mike Wall, a vastly experienced marine surveyor and lecturer in maritime studies, the book is full of diagrams and charts which are designed to illustrate every aspect of the marine surveying process likely to be encountered.

Different types of report format – covering many of the different types of report which the surveyor may be requested to complete

– are included in the appendices as templates which may be used by new surveyors. The book includes specific sections on discovery, evidence, protocols, terms and conditions of service, insurance, limiting liability and copyright issues. In preparing for a report, the surveyor also learns about interviewing skills, together with when to report facts and when to offer opinions. It is of particular value to new entrants to the industry for whom writing detailed, accurate and concise survey reports is an essential job requirement.

With its courses and books, Petrospot strives to offer the tools by which companies and individuals may continue to raise their levels of knowledge in order to do a better and more rewarding job, be it in bunkering or some related field.

Adam Dupré

Education and Training

‘Uniquely, the course will integrate the key

elements of bunkering, to demonstrate how

technical, commercial, operational, legal and

environmental issues are all inter-related and in the real world cannot be dealt

with in isolation’

Nigel Draffin

Nigel Draffi nNigel Draffi n

the advanced bunker course, the new title will also mark a progression towards a deeper understanding of this particular

Petrospot has already published six bunkering titles, An Introduction to Bunker

addition to the body of information available

– are included in the appendices as templates which may be used by new surveyors. The book includes specific sections on discovery, evidence, protocols, terms and conditions of service, insurance, limiting liability and copyright issues. In preparing for a report, the surveyor also learns about interviewing skills, together with when to report facts and when to offer opinions. It is of particular value to new entrants to the industry for whom writing detailed, accurate and concise survey reports is an essential job requirement.


Email: [email protected] Web: www.petrospot.com/oxford

NETHERLANDS: BunkerExperience 20119-13 May, Rotterdam-VlaardingenAll inclusive, intensive bunker course, with a mix of theory in the morning and real practice in the afternoon.Contact: Goris Vermeulen Tel: +32 484 168 780 Email: [email protected]

COLOMBIA: Maritime Week Americas 201123-27 May, Cartagena de IndiasThe most popular bunkering event in the Americas is coming to South America! Organised by Petrospot, Maritime Week Americas takes place at the Hotel Hilton Cartagena.Contact: Louise McKee Tel: +44 1295 814455 Fax: +44 1295 814466 Email: [email protected] Web: www.maritimeweekamericas.com

JUNE

TURKEY: Istanbul Bunker Conference1-3 June, IstanbulContact: The Turkish Bunker Association Web: www.istanbulbunkerconference.com

SEPTEMBER

NETHERLANDS: ARACON 2011September, RotterdamARACON 2011 is the one bunkering event serving the Amsterdam-Rotterdam-Antwerp region that serious maritime professionals should not miss!Contact: Osei Mitchell Tel: +44 1295 814455 Fax: +44 1295 814466 Email: [email protected]

UNITED KINGDOM: The Oxford Bunker Course12-16 September, OxfordContact: Osei Mitchell Tel: +44 1295 814455 Fax: +44 1295 814466 Email: [email protected] Web: www.petrospot.com/oxford

NOVEMBER

AFRICA: Oil & Shipping Africa 2011November, AfricaAfter two highly successful forays into West Africa, Petrospot returns to Africa for the third annual Oil & Shipping Africa. The conference and training course programmes now attract many African delegates, in addition to a growing number of foreign companies eager to learn about bunkering opportunities in this part of the world.Contact: Osei Mitchell Tel: +44 1295 814455 Fax: +44 1295 814466 Email: [email protected]

Events

Events Diary FEBRUARY

PANAMA: Panama Maritime X13-16 February, Panama

Billed as the biggest shipping event in Latin America, the Panama Maritime X Conference and Exhibition takes place at the Hotel Riu Panama Plaza. Petrospot has been appointed the event’s International Promoter.

Contact: Nicholas Leader Tel: +44 1295 814455 Email: [email protected] Web: www.panamamaritimeconference.com

UNITED KINGDOM: LNG: Fuel for Shipping15-16 February, London

Contact: Lloyd’s Maritime Academy Tel: +44 20 7017 5510 Fax: +44 20 7017 4745 Email: [email protected] Web: www.lloydsmaritimeacademy.com/ ks0220BSPOTWB

MARCH

GREECE: The Piraeus Bunker Course2-3 March, Piraeus

Petrospot returns to Greece with a highly practical training programme covering the technical, operational, commercial and legal aspects of bunkering. This two-day, information-packed training event focuses on bunker quality, delivery procedures, ship and barge operations and credit issues. It includes an onboard site visit to Piraeus harbour.

Contact: Osei Mitchell Tel: +44 1295 814455 Email: [email protected] Web: www.petrospot.com/piraeus

CHINA: TOC Asia15-17 March, Tianjin

Contact: IIR Exhibitions Tel: +44 20 7017 4394 Email: [email protected] Web: www.tocevents-asia.com

UNITED ARAB EMIRATES: The International Fujairah Bunkering & Fuel Oil Forum22-24 March, Fujairah

Contact: Conference Connection Tel: +65 6338 0064 Fax: +65 6338 4090 Email: [email protected] Web: www.cconnection.org

UNITED ARAB EMIRATES: World Ports & Trade Summit28-30 March, Abu Dhabi

Contact: Turret Media FZ LLC Tel: +971 2 401 2777 Fax: +971 2 401 1760 Email: [email protected] Web: www.WorldPortsAndTrade.com

APRIL

DENMARK: The 32nd International Bunker Conference (IBC)6-8 April, CopenhagenContact: BI Norwegian School of Management Tel: +47 46 41 01 87 Email: [email protected] Web: www.bunkerconference.com

SINGAPORE: The Oxford Bunker Course (Advanced) 12-14 April, SingaporeThis new three-day training programme is designed as a progression from the well-established introductory Oxford Bunker Course. It integrates every aspect of bunkering (operations, technical, commercial, environmental and legal) and will include detailed syndicate work. It is intended for those with at least two years’ experience of bunkering.Contact: Osei Mitchell Tel: +44 1295 814455 Fax: +44 1295 814466 Email: [email protected]

SINGAPORE: LNG – The Future Fuel for Shipping? 13 April, SingaporeAs LNG is increasingly seen as a viable – and green – option as a marine fuel, this highly-focused seminar investigates what the industry now needs to do to take this idea forward, examining the supply chain requirements and market preparedness for this exciting ‘new’ bunker fuel.Contact: Osei Mitchell Tel: +44 1295 814455 Fax: +44 1295 814466 Email: [email protected]

SINGAPORE: Managing Credit Risk 13 April, SingaporeThis seminar will give delegates the key information they need to manage their company’s vulnerability to credit issues. The seminar is delivered by some of the world’s leading authorities on bunker credit, finance and law, and will help delegates protect their business by recognising the risks involved.Contact: Osei Mitchell Tel: +44 1295 814455 Fax: +44 1295 814466 Email: [email protected]

MAY

UNITED KINGDOM: The Oxford Bunker Course9-13 May, OxfordThe Oxford Bunker Course is a highly intensive five-day residential training course covering technical, operational, commercial, financial and legal aspects of bunkering. Designed for newcomers to the business and for those who may already have some experience, it is widely acknowledged as the best bunker course in the world.Contact: Osei Mitchell Tel: +44 1295 814455 Fax: +44 1295 814466


Networking

On the move... Europe

Cockett Marine Oil Ltd has appointed Chris Turner as Group Technical Manager after spending 20 years at Inspectorate International, most recently as UK Technical Manager. Tel: +44 1689 883 437; Mob: +44 758 556 9201; Email: [email protected].

Lintec Testing Services has appointed Geoff Jones as Global Fuels Director, effective 1 April. Steve Bee succeeds him as General Manager, while Tracy Wardell succeeds Bee as Operations & Key Accounts Manager. Tel: +44 1325 390 180; Fax: +44 1325 460 055; Email: [email protected].

Compass Marine Fuels Ltd has relocated to Waterhouse Business Centre, Cromar Way, Chelmsford, Essex CM1 2QE, England. Tel: +44 1245 396 880; Fax: +44 870 762 5660; Email: [email protected].

Alexey Okhotnikov, formerly bunker manager of Marinebusiness Ltd, has joined Swedish bunker trader Elit Bunker AB. Tel: + 371 66100 160; Fax: +371 66100 159; Email: [email protected].

Alex Qin has been appointed Senior Bunker Trader and Team Leader in A/S Dan-Bunkering Ltd in Middelfart, Denmark. Tel: +45 6441 5401; Direct: +45 6421 5411; Mob: +45 3089 8418; Mob (China): +86 158 2122 1455; Fax: +45 6441 5301; Email: [email protected].

Michael Nielsen has been promoted to Senior Risk Manager at Bunker Holding A/S in Middelfart, Denmark. Tel: +45 8838 2828; Fax: +45 8838 2820.

Michael Poulsen has joined Global Risk

Management in Denmark as Oil Risk Manager. Tel: +45 8838 0014; Email: [email protected].

A/S Dan-Bunkering Ltd has appointed Jesper Møller Christensen as the Managing Director of Dan-Bunkering (Monaco) S.A.M., joined by Olga Balaban who has been promoted to Senior Bunker Trader and Sales Manager.

Martin Laue Brodersen, formerly with Trans-Tec, has joined J. Lauritzen A/S as bunker purchaser. Tel: +45 3396 8023; Email: [email protected]. Kim Laier has left the company and bunker manager Peter O. Soerensen has retired. Claus Kesting is the new bunker manager. Tel: +45 3396 8019; Email [email protected].

Ship-Service S.A. has relocated its Warsaw office to Ul. Luck 7/9, 00-842 Warsaw. Tel: +48 22 658 6140; Fax: +48 22 658 6491. Meanwhile, Barbara Ogiejko has joined the bunker department of the company’s Szczecin office. Tel. +48 91 431 8950; Mob: +48 605 542 602; Fax: +48 91 431 8989; Email: [email protected]. Piotr Dabrowski has left the company to work abroad.

Marc Harskamp and Raoul Oosthoek have joined OW Bunker’s newly-established OW Bunker Trading SA in Geneva.

Mideast & Africa

Jesper Porsmose, previously at OW Bunker & Trading A/S in Denmark, has joined the trading team at International Bunkering in Dubai. Tel: +971 4 437 1700; Mob: +971 55 551 0126; Fax: +971 4 428 1560; Email: [email protected].

South African Bunkering & Trading (SABT) has relocated to 101 Lagoon Beach Studios, 3 Lagoon Beach Road, Milnerton 7441, South Africa (PO Box 1159, Milnerton 7435). Tel: +27 21 551

9588; Fax: +27 21 551 9574.

Asia

Kwok Fook Sing has been appointed the new Regional Manager for Asia for the International Bunker Industry Association (IBIA), based at 352 Tanglin Road, #01-03, Singapore 247671. Tel: +65 6472 0 916; Mob: +65 9722 7494; Fax: +65 6472 0919; Email: [email protected].

Thomas Lee has joined KPI Bridge Oil in Singapore as a bunker trader. Tel: +65 6220 8655; Mob: +65 9754 6626; Fax: +65 6220 8155; Email: [email protected].

Americas

Juan Pablo Veas has been appointed Commercial and Operational Manager of Glencore’s central Chilean bunker supply operation, PMC. Tel: +56 32 279 6550; Mob: +56 9 7539 8852; Email: [email protected]. Hernan Pizarro continues as Deputy Commercial Manager. Mob: + 56 9 9817 2001; Email: [email protected]. Felipe Menchise now heads the administration and finance team.

Oceanbat S.A. has relocated to Avenida Francisco de Orellana y Miguel H. Alcivar, Centro Empresarial ‘Las Camaras’, Edificio Torres de Oficina, Piso 4 Oficicina 405, Guayaquil Ecuador. Tel: +593 4 268 0690; Direct (Michael Norton): +593 4 268 0695; (Amparo Brocel): +593 4 268 0698; Fax: +593 4 268 0694. Emails are unchanged.

Keith Richardson, Global Business Development Manager for Marine Fuel for Chemoil in San Francisco, has left the company. Tel: +1 415 268 2740.

To list details of new appointments, email: [email protected]

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