The International

Bunker Industry Association

Capt Peter W Hall

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IBIA’s-AIMS ? To provide an international forum for bunker industry issues;

To represent the industry in discussions and negotiations with national and international policy makers, legislators and other groups and bodies;

To review, clarify, improve, develop and endorse where appropriate, industry methods, practices and documentation;

To increase the professional understanding and competence of all who work in the industry;

To provide services and facilities for members and others as the Board shall from time to time consider appropriate.

Looking at the Supply chain

supplier Fuel Port Interface ship Engine

Who sells the bunkers

Independent Local Suppliers

NOCs

International Independent

Traders/Brokers

Majors

Into-Ship Revenues

23%

33%

22%

17%

BP Shell ExxonMobil Chevron

World Fuels Services Chemoil Aegean TotalFinaElf Gasprom/Lukoil – Russia Saudi Aramco NIOC – Iran PDVSA – Venezuela Petrobras – Brazil Chimbusco - China

Argos bunkering, Equatorial Macoil Maxcom as well as some 350 independent suppliers

There are some 1,200 supply offices operated by 600 companies

Trading Houses Marubeni, Sumitomo, Toyota,Dan Bunkering 5%

5

The chain Ship’s Agent

Chosen oil Supplier

4 4 4

4 3 3 3 3

10 1 2 5

6

8

9

12

12

11

11

11

7

Supply / Distribution Department

Shipowner

Ship

broker/trader/ Bunker dept.

Oil Supplier

Oil Supplier

Local Oil Supplier

Local Oil Supplier

Inquiry to purchase 1

Enquiry acknowledged 2

Enquiry to Suppliers 3

Quotation or refusal 4

Optimum price option 5

Counter or accept quotation, delivery details, agents name

6

Further possible price negotiations 7

Firm nomination plus delivery details 8

Acceptance of nomination 9

10 Confirmation: nomination placed and accepted

11 Instructions to supply ship, liaise with ship’s agent

12 Instructions to ship/ships agent and vessel

Current Marine Fuel Supply Chain? Buyer

Ship owner

Ship manager

Charterer

Supplier

Seller

Trader

Supplier

Refinery

Delivery

Barge

Jetty

Lorry

Ship

The Process is simple or is it? Fuel

Grade

MGO

LMDO

MDO

Distillate Diesel

ADO

Standard

8217

2005

2010

2012

Sample

Method and custody transfer

Laboratory accredited

People and equipment

Ship

Tank segregation

pipework

On board processing

Europe

UK/Ireland 2005 – 68.6%

2010 – 30.7%

France 2005 – 30.3%

2010 – 20.3%

ARA 2005 – 49.6% 2010 – 50.0%

Gib/Algeciras 2005 – 35.6% 2010 – 17.6%

Eastern Med

2005 – 80.4%

2010 – 17 1%

Italy 2005 – 66.8%

2010 – 15.4%

Baltic 2005 – 76.8%

2010 – 23.2%

Black Sea 2005 – 79.6%

2010 – 20.1%

Pressures on Quality Blending to meet lower sulphur requirements Inappropriate selection of blend components Low cost blend components Resulting problems – Stability, Ignition quality and

Contamination Buyers seeking lowest price in rising market. Fuel is

highest operating cost

What history tells us CARB Jan 2009 - Jul 2010

Source: CARB

LOP incidents doubled with the induction of CARB distillate regulation

Cost of Failure Engine damage Loss of power Safety issues – flash point De-bunkering Off hire Arrest

What is being done to improve quality? IMO - Contracts and ISO standards improved Ports Charter Ship owners and Operators Insurance Competency and understanding throughout

What is being done to improve Fuel Quality?

Test Samples

Ports Charter IMO-BDN Contract

Competency and understanding across the chain

Ports Charter Ports that sign the charter are committed to three key

principles, Establish measures to enable a Quality bunker fuel

supply to be delivered. Establish measures to ensure that the correct

Quantity is delivered. Demonstrate that the system that is operated within

the port is Transparent

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ENFORCEMENT & COMPLIANCE– A PORT’S PERSPECTIVE

Bunkering Regulations in Gibraltar:

• Bunker company must be licenced

• Each Bunker Barge must be licenced

• All licences subject to annual renewal

• Compliance with the Bunkering Code of Practice is compulsory

• Bunker Barges undergo annual Safety Survey inspection Flag State / Port State Standards

• Bunker Barges are subject to unannounced inspections / audits during operations

• Bunker Barges are subject to unannounced cargo sampling

Copyright Gibraltar Port Authority

Inspection Regime

Licence Requirements

Regulatory Framework

Bunker Operator

Port Operators Licence

Annual Review Process

Bunker Barge Licence

Unannounced Bunker Barge

Operation Audit

Unannounced Cargo Sampling

Annual Safety Survey

Conclusions Environmental and cost pressure -presses quality Standards play catch up - On board capability impaired Supply chain fragmented and with “new fuels” Participation – better solution with all involved New fuels are on the horizon. Become a member of IBIA?

Thank You

Why not join IBIA

Web site - www.ibia.net

Email-Ibia@ibia.net

Peter W Hall