COMING TO SINGAPORE: New horizons for bunkering · Michael Green of Intertek Lintec Shipcare...

INDEPENDENT INTELLIGENCE FOR THE GLOBAL BUNKER INDUSTRYwww.bunkerspot.com Volume 9 Number 5 October/ November 2012

Inside:• Asian Refining• Singapore Bunkering• Terms & Conditions• Market Regulation• Fuel Testing• News & Events

COMING TO SINGAPORE: New horizons for bunkering

bunkerspot October / November 2012 www.bunkerspot.com 3

FEATURES

REGIONAL FOCUS: ASIAN REFININGNg Yew Yee of Wood Mackenzie highlights the market potential for refiners caused by increasing diesel and gasoil deficits in Asia’s emerging economies 28

MARKET TALKChris Thorpe argues that the results of heavy-handed government intervention in the markets are often worse than the perceived advantage 32

CREDIT MANAGEMENTAs Singapore prepared to host SIBCON, John Phillips looks at key credit issues on the bunker market’s horizon 36

Félix Yamasato finds that a new breed of bunker credit managers has to adopt innovative ways to benchmark their customers 40

LEGAL ISSUESCarel van Lynden looks at the contentious issue of T&Cs from a seller’s perspective 42

ENVIRONMENTAL ISSUESJonathan Roberts of Maritime UK argues that ECA regulations could bring some unintended, and undesirable, side effects 46

FUEL TESTINGEirik Andreassen of DNVPS gives his perspective on Singapore bunkering 48

Michael Green of Intertek Lintec Shipcare Services flags up fuel quality concerns that have emerged in the second quarter of 2012 50

REASEARCH AND DEVELOPMENTYasushi Nakamura of ClassNK gives a progress report on a new research project into vessel performance at sea 54

BUSINESS PERSPECTIVESAs maritime and bunkering communities face up to the operational, financial and legislative hurdles posed by environmental regulations, Rosneft discusses how these challenges can be turned into opportunities 56

CUSTOMER RELATIONSHIP MANAGEMENTLars Møller argues that the bunkering industry needs to look to its traditional values in order to meet today’s challenges 58

NETWORKINGBunker people on the move 60

EVENTSLlewellyn Bankes-Hughes previews the Bunkering Symposium 2012, an event that has gained a reputation for in-depth analysis and often heated debate 61Events and training course diary 62

Contents

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ACCOUNTSHelen Wilkins [email protected]

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NEWS Bunker Overview 4

Europe 8

Americas 18

Asia Pacific 22

Africa and Mideast 26

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 © 2012. 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. Disclaimer: Bunkerspot is an editorially independent magazine and electronic news information service. The information contained in the magazine and website is presented in good faith. Opinions expressed are not necessarily those of Petrospot Limited, which does not guarantee the accuracy of the information contained in Bunkerspot. Nor does Petrospot accept responsibility for errors or omissions or their consequences. No part of Bunkerspot may be reproduced, stored in a retrieval system or transmitted in any form or by any means electronic, mechanical, photographic, recorded or otherwise, without the prior written permission of the publisher. Visit www.petrospot.com

October / November 2012 bunkerspotwww.bunkerspot.com4

Bunker Overview

When markets get complicated, go back to basics

800

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Singapore MDO

Fujairah MDO

Rotterdam MDO

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

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Global crude oil prices looked to be weakening at the start of October. The oil markets were mainly reacting to the news that China had racked up its seventh straight quarter of slowing economic growth, but the ‘Eurozone crisis’, as usual, was also a factor.

While the Eurozone crisis always seems to be with us, its epicentre has moved on. The horsetrading among Greece’s political parties was the key issue a few months ago, and the TV cameras have since shifted their focus to Spain.

As this issue of Bunkerspot went to press, Spain’s Prime Minister, Mariano Rajoy, and Economy Minister, Luis de Guindos, were both holding talks with the European Commissioner for Economic and Monetary Affairs, Olli Rehn, about plans to shore up their country’s finances.

Spain’s problems have been compounded by a severe drought which has been described as being of ‘biblical proportions’ and, rather less sensationally, the worst since 1945. The

12 month rolling price charts

drought has seen oil prices shoot up by more than 50% since July, with further price hikes on the horizon. The ‘oil’ in question here is olive oil rather than the black stuff – but this major blow for the Spanish rural community will have knock-on effects for the wider Spanish and Mediterranean community.

The United States too has been suffering a prolonged drought which has affected a vast expansion of its farming heartland: more than half of Texas, 95% of Oklahoma, the entire state of Kansas and a great deal else besides. At first glance, the woes of Wyoming and Dakota may not seem pertinent to the bunkering world.

However, the shortfall in US crops has bumped up food prices, which in turn has fuelled inflationary pressure across the national economy.

So, as ever, the markets are balanced between competing factors – the slow-down in China and Europe’s budget deficits, set against the upward pressure from rising food

production costs – and prices could swing either way.

Of course, the recent hiatus in China’s growth has to be seen in context. Overall, China is still an expanding economy and a voracious consumer of oil products.

As Ng Yew Yee of Wood Mackenzie points out on page 28 of this issue of Bunkerspot, China (including Hong Kong) is still seeing an exceptional demand growth in diesel/gasoil imports, which have risen from around 50,000 barrels a day (b/d) in 2010 to a projected 300,000 b/d by 2013. Perhaps the key messages coming out of Wood Mackenzie’s research is that ‘the growing need for export refineries to be highly flexible is critical in maintaining a competitive edge’. It is not just a matter of pumping out the fuel, it has to be right kind of fuel – and refineries need to be fleet-footed in switching their product to match changing demand patterns. If this is true for refiners, it is also true for bunker suppliers.

Marine Diesel Oil

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Bunker Overview

GLANDER

In his article on fuel testing, Michael Green of Lintec Shipcare Services describes the recent implementation of the North American Emission Control Area (ECA) as ‘one of the biggest shifts in regulatory limits since the introduction of MARPOL Annex VI’ (see page 50). Eirik Andreassen of DNV Petroleum Services (DNVPS) argues on page 48 that the North American ECA ‘presents a significant opportunity’ for suppliers of low sulphur fuel – and this applies ‘even to ports outside the ECA, such as Singapore’.

Bunker buying has never been just a matter of getting the cheapest deal. Buyers who only have eyes for the price, glossing over the complicated fuel quality parameters and fiddly terms and conditions, always come unstuck. And in today’s market, where ships have to weave their way between ECAs and switch their fuels accordingly, an attention to detail and quality is more important than ever.

These are major challenges for bunker buyers and, as Rosneft argues on page 56, ‘this presents opportunities for leading fuel suppliers to add value to their customers by providing solutions to these challenges’.

In essence, suppliers – if they want to build strong and lasting relationships with their clients – have to be fuel consultants, advising on ECAs and the prospect for alternative technologies, not the marine equivalent of pump attendants.

In the late 1990s, at the height of ‘dot.com’ mania, the bunker community was suddenly presented with a profusion of electronic trading sites that gave the impression they could make bunker buying as easy as clicking a button.

Wiser heads said that the internet would certainly speed up the transaction process, but this would complement, not replace, the fundamental relationship between buyers, traders and brokers. They have been proved right.

It doesn’t matter if you are signing a deal with an iPhone5 or a quill and ink, you still need to know your counter-party and to have read – and understood – the terms and conditions (a theme which Carel van Lynden takes forward on page 42, in response to Ivar Tonnesen’s article in our previous issue). Bunkering is still about relationships, and trust based on knowledge.

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

380 IFO August September30-03 06-10 13-17 20-24 27-31 03-07 10-14 17-21 24-28

Rotterdam d 610 629 647 656 651 660 665 644 638Gibraltar d 627 651 677 682 677 678 687 678 661Piraeus d 627 649 664 679 672 682 685 674 659

Suez d 685 681 677 686 670 680 690 705 698Fujairah d 642 657 673 685 689 694 695 676 661Durban w n/a n/a n/a n/a n/a n/a n/a n/a n/a

Tokyo d 673 685 699 699 704 711 722 719 716Busan d 651 662 658 688 693 710 722 710 700Hong Kong d 648 660 681 690 691 697 701 682 671Singapore d 630 645 660 673 670 683 691 675 656

Los Angeles w 618 646 665 659 696 685 681 660 689Houston w 619 634 650 663 659 664 669 652 647New York w 636 640 652 660 661 666 676 664 657

Panama w 636 646 661 679 663 677 678 676 674Santos d 636 638 666 691 690 689 690 684 649Buenos Aires d 614 616 623 645 654 667 667 667 658

180 IFO August September30-03 06-10 13-17 20-24 27-31 03-07 10-14 17-21 24-28


Suez d 705 699 702 711 701 707 712 733 729Fujairah d 663 677 694 704 709 713 709 695 689Durban w 644 664 688 703 707 711 712 698 683




MDO August September30-03 06-10 13-17 20-24 27-31 03-07 10-14 17-21 24-28


Suez d 1126 1136 1092 1088 1053 1072 1063 1082 1081Fujairah d 1008 1008 1025 1027 1043 1050 1040 1033 1020Durban w 1131 1135 1133 1131 1129 1131 1127 1122 1109




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


‘To balance out the markets for gasoline and diesel/

gasoil, Asian refiners need to shift on an average of 1%

of their entire production from gasoline to diesel/

gasoil progressively until 2015’

Gasoline balances by country/region in Asia Pacific

expected to grow by 2015 due to declining demand in the Atlantic basin, increasing gasoline supply in the Middle East and Asia, and increasing use of biofuels. As a result, Indian private ref iners, primarily Reliance, and Singapore exporters are expected to experience a strong push-back on their gasoline exports of approximately 140,000 b/d, as their key markets of the United States, Iran and UAE become more self-suff icient. Intense competition is thus expected within Asia between India, Singapore, South Korea and Taiwan ref iners seeking to retain their existing markets and capture new ones such as Australia.

Asia currently has a large diesel/gasoil surplus coming mainly from North Asia, Indian private ref iners and Singapore. Asia currently exports diesel/gasoil to long-haul markets such as Europe, Latin America and Africa. Diesel/gasoil def icits for Indian state ref iners will continue to increase by 2015.

Wood Mackenzie believes that China

A global surplus of gasoline has reduced the export opportunities of many refiners

within the Asia Pacific region. However, increasing deficits for diesel/gasoil in Asia’s emerging economies provide an opportunity for refiners with f lexibility to switch from gasoline to diesel/gasoil and so maximise their margins.

Regional imbalancesOverall, Asia currently has a gasoline surplus but this hides the imbalances within the region. The main gasoline deficit exists with Indian public sector undertakings (PSUs), South-East Asia (excluding Singapore) and Australia. The surplus exists with India’s private ref iners, Singapore, China and North Asia (South Korea, Japan and Taiwan).

From 2010 to 2015, we see a strong growth of gasoline surplus in North Asia, largely due to the upgrading investments in Taiwan and South Korea. These upgrading units include residue catalytic cracking (RCC), alkylation and methyl tertiary butyl ether (MTBE) units. During this f ive-year timescale, only a few countries, such as Indonesia and Vietnam in South-East Asia (SEA) and Australia, are expected to see a widening gasoline deficit. Moreover, these deficit gains are small as compared to the signif icant gains in gasoline surplus in North Asia. Hence, Asia’s gasoline surplus is expected to increase by around 70,000 barrels per day (b/d) during this period.

At a global level, gasoline surplus is

Regional Focus: Asian Refining

Ng Yew Yee of Wood Mackenzie highlights the market potential

for refiners caused by increasing diesel and

gasoil deficits in Asia’s emerging economies

Refining options

Contact:Ng Yew YeeAsia Pacific Downstream AnalystWood MackenzieSingaporeEmail: [email protected]: www.woodmac.com


(including Hong Kong) will require six times more diesel/gasoil imports, from around 50,000 b/d in 2010 to about 300,000 b/d by 2015.

Exceptional demandThis exceptional demand growth in China and India is mainly coming from increasing commercial freight as these economies grow. China would therefore emerge as the key driver of Asian diesel/gasoil trade-f lows by 2015.

Australian diesel/gasoil def icit will rise by around 80,000 b/d, with approximately 50,000 b/d attributed to the closure of the Clyde and Kurnell ref ineries in the next few years (see page 22).

Wood Mackenzie forecasts total Asian demand for diesel/gasoil to grow from 8.65 million barrels b/d to 9.78 million b/d from 2012 to 2015. This steep demand growth will outpace the increase in diesel/gasoil supply by 2015, resulting in a lower diesel/gasoil surplus in Asia. Growing deficits in China, India, SEA and Australia will provide more opportunities for Asian export ref iners in Singapore, South Korea, Taiwan and India to increase exports to these closer-to-home markets.

North Asian ref iners and Indian private ref iners will most likely turn to target the nearby diesel/gasoil markets of China and India respectively. We thus foresee a reduction of approximately 250,000 b/d in diesel/gasoil exports from Asia to the rest of the world. From a global perspective, however, the growing deficits for diesel/

Diesel/gasoil balances by country/region in Asia Pacific

‘Increasing deficits for diesel/gasoil in Asia’s emerging economies

provide an opportunity for refiners with flexibility to switch from gasoline to diesel/gasoil and so

maximise their margins’

gasoil in Europe, Latin America and Africa will continue to provide arbitrage opportunities for Asian export ref iners, thereby creating a need for greater diesel production in Asia. However, Asian exporters will face stiff competition from the new Middle East capacity and rising US exports, which are strategically located to supply Europe, Africa and Latin America.

In view of a rising gasoline surplus, we believe that gasoline crack spreads versus Dubai crude are expected to decline

from 2010 to 2015. However, diesel crack spreads versus Dubai crude are expected to strengthen from $15.80 per barrel (bbl) in 2010 to $20.30/ bbl in 2015. To balance out the markets for gasoline and diesel/gasoil, as well as to maximise ref ining returns, Asian ref iners need to shift on an average of one percent of their entire production from gasoline to diesel/gasoil progressively until 2015.

Flexibility is crucialThe growing need for export ref iners to be highly f lexible is critical in maintaining a competitive edge in Asia Pacif ic. Refiners may face some challenges around the f lexibility to switch yields with limitations around ref inery configuration; crude slate for the ref inery; export logistics, etc. However, in a situation where a ref iner is unable to f ind markets for surplus gasoline and is unable to switch yields, its utilisation rates could come under pressure and so adversely impact profitability and long term sustainability.

Regional Focus: Asian Refining


‘Most speculators in the oil market count on the invisible hand to move markets based on supply and demand as well as economic shocks. However the existence of government-held SPRs raises

another spectre of risk’

‘If you have the chance to walk through a

modernised plant of any kind today, you would be likely amazed at the level of security and the

degree of quotidian safety precautions’

for years.In August, an explosion at the Amuay

refinery killed 48 people with no warning. Not only did this disaster take the lives of both refinery workers and nearby neighbours, it crimped the supply of refined products to the entire country as well as some 150,000 barrels a day (b/d) of residual fuels for export to the Caribbean and Central American markets. PDVSA is not alone in bearing responsibility for the loss of human life due to poor safety management. Under similar circumstances related to safety, 15 workers were killed at a BP refinery in Texas in 2005 and more than 50 people were killed at Hindustan Petroleum’s facility in India in 1997. One could argue that government control would have been advantageous and in the best interest of the market in this case. But the question may be which government? In the case of Venezuela, government management may have neglected maintenance and therefore elevated safety risks for employees and surrounding communities.

Given modern technology, tightening quality control and strict safety rules in the workplace, human casualties should be rare in the oil and refining industries. If you have the chance to walk through a modernised plant of any kind today, you would be likely amazed at the level of security and the degree of quotidian safety precautions. It could be argued that the natural position of public companies is to minimise liability regardless of government regulation. Adam Smith would have grinned.

To the extent that oil and refining companies may not be subject to public

Market Talk

Chris Thorpe argues that the results of heavy-

handed government intervention in the

markets are often worse than the perceived

advantage

Hands off!

Chris Thorpe is Executive Director, Global Energy Derivatives, with INTL FCStone Inc.

Contact: Chris Thorpe INTL FCStone Inc. Tel: +1 212 774 5963 Web: www.intlfcstone.com

If the 18th century classical economist Adam Smith were filling his fuel tank today, he would be surprised

by some of the market forces at work. Could he have possibly imagined the power of government controlling oil supplies through a Strategic Petroleum Reserve (SPR) or even markets that exhibited more depth on paper than they did in physical markets?

With commodity prices having a significant influence on global economics, price controls may be increasingly common despite modern free trade agreements. Although markets have matured and ‘free’ trade is common practice, Smith’s theories on markets remain relevant in the oil markets.

When The Wealth of Nations was originally published in 1776, Smith proposed the concept of the ‘invisible hand’, suggesting that if markets were indeed free, and if the players conducted themselves in their own best interests, then the overall economy should work well.

At first glance, the concept seems as reasonable today as it did then. Two hundred years hence, it seems more practical to propose that markets continuously react to new market constraints – imposed by government or otherwise. In oil markets, several producing regions are under strict government influence – some more than others.

Venezuelan experienceA case in point is Venezuela, with the largest proven oils reserves globally with 297 billion barrels according to BP’s Strategic Review of World Energy 2012. Since nationalising its oil industry and creating Petroleos de Venezuela S.A. (PDVSA) in the 1970s, the effect of government on oil and refined products has been markedly changed. Since the election of Hugo Chavez in 1998, the government has increased its influence and imposed more ‘participation’ via PDVSA and eventually forced many foreign investors out. Interestingly, although in his mind Chavez may have been working to improve his country’s position, Venezuelan oil production has steadily decreased since 1997. Additionally, maintenance and safety at the nation’s refineries may have been neglected


‘Perhaps high fuel prices are good because

consumers must change their behaviour.

If consumers expect prices to be capped by

government intervention, there is less incentive to change their behaviours’

occur in the case of a real emergency such as war. If the SPR in the United States or Europe is released without such a war, Smith would argue that we are all worse off. The G7 leaders would argue that high oil prices are causing harm on fuel consumers, thereby worsening the chances of an economic recovery. Perhaps high fuel prices are good because consumers must change their behaviour.

If consumers expect prices to be capped by government intervention, there is less incentive to change their behaviours. Perhaps they would travel less or drive more fuel efficient vehicles. Smith might hope for persistently higher prices and to see the invisible hand affect this kind of consumer behaviour.

Adam Smith was well aware that markets were not clearing in absolute freedom. What is interesting is that price controls still exist today in a variety of fuel markets. And it’s not just the heavy handed government controls of China or Venezuela or the Middle Eastern countries. The maritime provinces of Canada still impose gasoline price levels that are set on semi-regular schedule with east coast markets.

The results of government intervention are often worse than the perceived advantage. Either way, markets tend to become efficient over time regardless of government participation. And once the players can anticipate government controls, the invisible hand may shift free markets to take advantage of mispricing.

Price riskStudying this kind of market behaviour can put price risk management into context and ultimately help fuel buyers contain their price risk. Smith did not have the luxury of proposing price management tools in his days, but the modern fuel manager does.

Market Talk

these fuel groups being economically viable (in the United States) is very limited given the input costs and capital costs of refining. Americans will not easily forget the fuel additive experience of the 1990s when government oxygenate mandates fortified significant investments in methyl-tertiary-butyl-ether (MTBE) with investments based on replacement costs of between $2.6 billion and $3.8 billion in the United States alone, according to the Energy Information Administration (EIA). Although greenfield ethanol plants in the United States are unlikely in the near future, the country’s annual capacity has increased to 14.7 billion gallons thanks to a 10% gasoline pool blending mandate among other market incentives which continue to be modified. If the invisible hand of the market was at work ethanol would have only been produced if there had been low cost corn or soybean crush stocks or relatively premium value gasoline. The economics for investment were never possible without government incentives. By August 2012, rising grain and bean prices created weak or negative profit margins for the most efficient ethanol producers.

In Smith’s world, food inputs competing in the fuel market would never work unless agricultural commodities were very cheap or fuel was extremely expensive. Creating an incentive to produce fuel with food inputs increases the demand and puts upward pressure on prices for food manufacturers. The loser in this situation is the lowest socio-economic group which pays for costlier food. Adam Smith would laugh or cry – maybe both. Either way, the speculators cannot afford to invest in new renewable fuel capacity without the government sponsor, which is now the first guarantor of the business.

Beware when governments control priceMost speculators in the oil market count on the invisible hand to move markets based on supply and demand as well as economic shocks. However, the existence of government-held SPRs raises another spectre of risk. While the 2011 release of the SPR in the United States and Europe occurred during the war in Libya, the case being made in 2012 is absent of war. This time, the G7 members urge that it is necessary to relieve persistently high oil prices to avert economic crisis. The case of an SPR release makes a perfect example of Smith’s theory. In his view, the case for holding spare capacity by speculators awaiting higher prices actually saves the market from a supply shortage. If spare inventory were released without necessity, then a complete shortage would

scrutiny or may be mismanaged by government management, the invisible hand may have a light touch. However, since Chinese companies have become more involved with Venezuela through a market driven need for resources, a positive outcome could result. Perhaps by coincidence, but more likely by necessity, Wison Group (the largest private Chinese engineering and construction company) recently signed a $3 billion contract for work at Venezuela’s Puerto La Cruz refinery. This follows several agreements between PDVSA and Chinese companies for joint ventures in China. The market forces that drive these strategic alliances are the result of global trade and evolving commercial agreements.

Environmental inequalityGiven what is now a tiring economic malaise, international agreements on environmental quality, fuel emissions and controls have become less of a priority. It is surprising to see the marine fuels industry move forward so ambitiously with its Emission Control Areas (ECAs) and low sulphur standards in a period of such abysmal marine business conditions. The compliance costs alone are substantial. If the Kyoto round of voluntary greenhouse gas (GHG) emission restrictions had been successful, follow-on protocols may have been more likely to progress. On the contrary, the ECAs designated by the International Maritime Organization (IMO) seemed to have forced through aggressive timetables. The ECA standards set very low 1,000 parts per million (ppm) fuel sulphur content limits by 2015 and areas outside the ECA may be subject to 5,000 ppm by 2020. In this case, Smith may well have argued that the market clearly calls for flexibility given economic circumstances. After all, the United States declined to sign the Kyoto protocol, claiming it was not in a position to restrict its economic activity. Even Canada, which originally signed in 1997, renounced the agreement in 2011 because it did not ‘represent the way forward for Canada’, according to Environment Minister Peter Kent. Either singular interest trumps the greater good or the weight of the invisible hand eventually becomes overwhelming.

Government subsidiesThe same can be said for government intervention in transportation fuels on land. Renewable fuels including biodiesel and ethanol have been economically dependent on government subsidies and tax credits for a decade. The chance of either one of


markets driven by slowing demand and an over supply of ships (choose a segment, few are immune). As shipping analysts, we get used to looking at tonne/miles inter-relationships to absorb some of the excess or port congestion. The problem is that for most sectors, port congestion has eased with boom market projects now in operation. However, with lowered usage, coupled with the shift to an Asia-centric market producing in many cases shorter hauls, there is no immediate remedy in sight.

Add to this mix the factors that financial reserves in almost all shipping companies have been depleted as a result of fighting off the impact of year-on-year losses and that many banks have lost their love affair with shipping, and the outcome becomes clear.

We could easily speculate on who will be next, following a spate of collapses that have enveloped well-known names like Korea Line Corp., The Sanko Steamship Co. Ltd and General Maritime Corp. Certainly, quarter-on-quarter losses cannot be carried indefinitely, and thus many of the operators of larger tankers and even household names such as Overseas Shipholding Group Inc. (OSG) will certainly have their work cut out to avoid similar fates. Neither the Eitzen Group nor Torm AS are out of the woods yet, and now we hear that OSG may be heading in a similar direction. However, we need to look in our own backyard, the Asia-Pacific region. We have all become aware of the problems around PT Berlian Laju Tankers Tbk, and this has much to play out yet. When we look even closer to home, the traders and suppliers active in the Singapore market are worth serious review. Typically, they will be asset weak; or, where assets exist, leverage will probably be high and profit margins slim, if existing at all. Debt servicing may actually be the least of the worries facing those companies in Singapore. A far bigger concern may be banks being reluctant to provide facilities for day-to-day trading, as their passion for the sector wanes. Businesses

‘The role of the credit manager within a

structured credit policy is as important to the success of a business

today as it has been at any time in the past’

Every two years it appears that the bunker world decamps from its usual bases and moves to

Singapore for the Singapore International Bunker Conference (SIBCON), one of the largest events on the global bunker calendar and properly located at the heart of the bunker market.

This year, 2012, could be a very interesting one for SIBCON. Whilst the 2010 event was the first in the aftermath of the 2008 market collapse, it appeared that most businesses had managed to navigate the hazards in a reasonably responsible manner. At the time I was fortunate, or maybe unfortunate, enough to find myself in the middle of this mêlée. Ruminating on the issues of multi-million dollar open credit lines, banks’ reluctance to look at the position today, when last year's financials were available, reduced credit insurance capacity in the market, and the growing spectre of concentration risk by sector. This year, many of these fears have returned and, moreover, some of the support mechanisms have been reduced by two more years of difficult conditions.

In 2010, concerns certainly existed over some of the larger container lines, but for those watching most closely (such as ourselves in the credit reporting sector, and indeed our friends in credit management at most of the supply companies) the corner had already been turned by late 2010. Even CMA-CGM S.A. was looking to report positive numbers, which it eventually did to the level of $1. 6 billion for 2010, a staggering swing from the losses of 2009. To many, this suggested that the problem was over, and it would be all plain sailing from there.

Sadly, these performances masked a deeper truth: the recovery in 2010 was largely achieved off the back of laid-up tonnage, refocusing of lines’ operations and an ability through some global market improvements to enforce summer peak season subsidies and, of course, a lower fuel cost. This is an important issue to ponder on. Average 380 centistoke (cst) bunker fuel price at Singapore was $372 a tonne in 2009, $464 in 2010 and $646 in 2011. Thus far, in 2012 prices have averaged around $682 a tonne. Given these increased costs, the market is perhaps more fragile now than in the days after late 2008 when the problem was more one of a shock to the system, with many in the sector experiencing something that they not previously encountered: a downward market.

So what have we got in 2012? Well, now the situation is very different. High bunker prices are set against continuing low freight

As Singapore prepared to host SIBCON, John

Phillips looks at key credit issues on the bunker

market’s horizon

Credit Management

John Phillips is the Managing Director of Awyr Las Pte Ltd and Ocean Intelligence Pte Ltd.

Contact:John Phillips Ocean Intelligence Pte LtdTel: +65 6601 9169Email: [email protected]: www.oceanintelligence.com

Event horizon


so wrong with such repetitive consistency when it comes to the bunkering market? Is it greed?

Here at Ocean Intelligence Pte Ltd, and also within Awyr Las Pte Ltd (our credit management consultancy and project management unit), we obtain a wealth of data, and we process it using established systems and methodologies. We feel justified in our opinions expressed in the reports we produce (as do our competitors) but will they meet all our customer risk/reward expectations? Probably not, and this is because we all have different attitudes towards those risks. Some are more averse than others. The decision must remain with the customer, and it is here that having a workable credit policy is essential.

Once that policy exists then all other elements can fall into place within that structure. For some this may include modeling, for others, just obtaining one or more credit reports from the market is sufficient. Some may like to include credit insurance as part of a policy, set approval limits and/or expected ROE. That is the difficulty, in meeting all the expectations of all the customers. Perhaps, just perhaps, it is this that has resulted in the number of ‘hits’ that have been taken in 2012.

will therefore be left highly exposed and forced to make delays in payments.

For the Singapore bunkering sector, this has been a difficult year, one in which the number of Maritime and Port Authority of Singapore (MPA) supplier licences has risen and fallen with a rapidity seldom before seen. As of 15 September, the number was now down to 75, following Ocean Energy Bunkering Pte Ltd and Bakri Trading Co (Asia) Pte Ltd failing to renew their licences. The year has seen issues surrounding Trio Energy Resources Pte Ltd, Prestige Marine Services Pte Ltd, Gas Trade (S) Pte Ltd, and Onsys Energy Pte Ltd, and now we hear murmurs that at least two more may be having difficulties. This is already a high concentration, given that the last big issue was probably Ignition Point Pte Ltd in 2008. The MPA may certainly have its shop in order, but how reliable are some of those names in the current trading portfolio?

So the challenge remains, how to select the correct counter-part, and at what risk/reward margin? To me, it seems that the role of the credit manager within a structured credit policy is as important to the success of a business today as it has been at any time in the past. But do we really fully understand the function? Is it just to provide a credit

assessment of a counter-part or is there a commercial aspect? It is easy to say ‘no’ to a piece of business as being undesired, but then this is where the margin is, and with banks less willing to support, the opportunities for some players to make hay whilst the sun shines by providing credit facilities, at a cost, is obvious. So then the question is perhaps, more of a matter if it is a ‘no’, then is there a price at which it becomes a ‘yes’?

Nothing in life is risk free. Each and every step we take, each and every day of our lives, includes a degree of calculated risk, and we mostly do this subconsciously. In effect we are our own little actuary units, and we have a commercial side too in the sense that the decisions we make may be weighted by the potential of reward. If I run across the road, instead of using an underpass, I can get the bus. So why do we seem to get it

Credit Management

‘Nothing in life is risk free. Each and every step we take, each and every day of our lives, includes a

degree of calculated risk’


increase. This has been particularly skewed towards

increased share of the volumes coming from Latin America and Asia. At Lloyd’s List Intelligence, we have seen increased demand for reports in those regions at the expense of companies in Europe and the United States.

Since bunker players, and bunker traders in particular, are effectively banks disguised as commodities traders (which means that they do not have to face stringent regulations such as capital requirements), there was a need for professional credit managers that had to build a proficient team around them. Some large players have opted to hire managers with strong financial backgrounds. In my view, this was a great idea because it introduces risk metrics into a function that most have considered an art rather than a science.

A perfect example is World Fuel Services (WFS), which claims that one of its core competitive advantages is ‘understanding which companies are the strongest players in the market’. The company described its own role in its latest quarterly earnings presentation as acting as ‘merchant bankers’, since it needs to understand its clients’ business models and financial conditions in order to offer flexible payment terms (longer or shorter).

WFS enjoys the benefit of an excellent capital structure that allows for enough flexibility to have marketed 6.4 million metric tonnes (mt) of marine fuels in its latest April-June quarter alone. Such volume of transactions would in itself imply that its definition of ‘strongest players’ probably stretches this group beyond the top 20% of companies in their respective sub-sectors.

A much smaller bunker trader is not able to use its balance sheet in the same way, so the decision to extend credit or not is much more crucial to the survival of the company than ever before, given the prolonged downturn we are experiencing (approximately four years now).

A new class of bunker credit manager has to develop a way to benchmark (financially and operationally) all its customers and any potential new customers – not only against each other but against its relevant peer group, given the global nature of maritime shipping. If you are not doing this, you really do not know the real risk of extending credit to your customer. A bunker player that does not have a credit manager who is disconnected from the sales force should be considered a high risk. Be sure to ask if your bunker supplier/trader customer has an experienced credit manager, and what kind of credit manager he or she is, before you grant credit.

When I first arrived at MRC – now Lloyd’s List Intelligence (LLI) – in the spring of 1997,

I was shocked that a very senior analyst implied that financial analysis was not that important in the bunker business. This was the year the ‘Asian financial crisis’ happened and a number of insolvencies happened!

At this time there were two credit reporting agencies and MRC was by far the leading supplier to the bunker industry. The emphasis was mostly placed around ‘intelligence gathering’ (a.k.a. credit references) and the general state of the particular sub-sector in order to gauge liquidity. Even when financials were available the level of analysis was so poor that it was standard practice to use working capital and current ratio as the sole measure of liquidity.

I covered this issue in previous article in this magazine (see Bunkerspot, June/July, page 26). To summarise, liquidity is comprised of cash (and cash equivalents) plus any available credit facilities plus cash flow from operations (not net profits or any other accounting-based piece of data).

Since 1997, two new reporting agencies emerged from the old MRC, but this failed to produce any real improvement in the quality of the information that was provided. There were many reasons why this happened, including the lack of expertise to produce intelligent financial analysis to support the rest of the analysis. Bunker players were, and are, partly to blame, because unless you were a major supplier, the position of credit manager did not exist amongst most bunker traders – even those with global operations. Often, the credit decision was made by the trader or senior trader in the organisation.

The first crop of credit managers continued to emphasise the ‘know your customer’ mantra, and this was just fine until we faced a very prolonged downturn in the shipping markets. One of the biggest problems facing credit managers now, as it has always been, is determining with some degree of certainty the financial state of the buyer, whether or not financial statements are available.

The lack of financial statements in itself is not a reason to deny credit, even when the buyer operates within an industry under prolonged low profitability or sustained unprofitability. No matter the state of the market, the best players will continue to do business and marginal players will disappear. There are always cargoes to be transported and, despite the global economic turmoil, volumes transported have continued to

Félix Yamasato finds that a new breed of

bunker credit managers has to adopt innovative

ways to benchmark their customers

Credit Management

The new breed

Félix 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


‘Quality can and will usually be determined

within a week, and it is fair to limit the claim period because the possibility

to check and take action quickly diminishes with

time’

have access to initiatives that protect their position.

● Suppliers sell not only to owners, but also to charterers. Supply takes place all over the world. Time is of the essence. It is the responsibility of a buyer, be it an owner or a charterer, to instruct the master and off icers of a vessel properly in respect of quality and quantity control. It is the buyer who chooses the time and place for supply, not the supplier.

When looking at STCs in light of the above, one may have more sympathy for the fact that certain clauses favour the seller. And, incidentally, favourable provisions for a supplier, including limitation of liability, are far from unique to the shipping industry. In almost all industries, sellers use general terms and conditions (GTCs) which contain clauses in their favour. It is simply the way it works.

Addressing specif ically the various points raised by Ivar, I will comment in line with the headings used in his article.

DefinitionsA supplier delivers fuel to a ship at a place and time chosen by the buyer, whether that be an owner or a charterer. The supplier instructs a local physical supplier. Of course the buyer is not there to inspect what he is getting, but that is why it is his responsibility to instruct the master and crew properly with regard to checking on quantity and quality. For that reason, for instance, the master is mentioned. Indeed (see also under ‘Payment terms’) sellers often name as the buyer everyone they can think of. The f irst question to Ivar is, ‘Why bother?’ It is not the buyer’s problem. Secondly, a contract is between the contracting parties – the seller and the buyer. The mere mention of other parties does not necessarily make them parties. Mentioning the master and the owners and the vessel may, however, have some impact under certain systems of

In the August/September 2012 issue of Bunkerspot, Ivar Tonnesen writes: ‘Buyer, beware!’Ivar takes a strong position against

sellers’ terms and conditions (STCs), which he categorises as ‘legal mumbo jumbo’. The article calls for a rebuttal.

Ivar says that, given the option, he would not buy a drop of oil from certain sellers using such STCs. He discusses a number of clauses, and concludes that many of them are very one-sided and unfair.

True, some clauses in STCs are one-sided. But that doesn’t necessarily mean that they are unfair. And the fact that a bunker trader may not always understand some clauses, equally, cannot be a surprise. The question is whether the clauses make sense and are, from a commercial and market point of view, justif ied or at least understandable.

In that respect, it is only fair to recognise a number of things before reading – and judging – STCs.

● We all know that owners and charterers like to pay as little as possible for bunkers. In that respect they are just normal human beings. As this is a buyer’s market, margins are low. Where margins are low and potential damages are high, it is understandable that suppliers want to limit their liability. Courts tend to accept such liability-limiting provisions in favour of a supplier.

● By far the largest volume of bunkers is sold not by the producers of the oil (such as ref ineries) but by companies who in their turn buy the bunkers from producers. Such suppliers (not being the producers) buy the product on specif ications supplied by the producers and on the basis of analysis reports from land tanks. They themselves have no control over the quality of the product. I am not saying that the risk should therefore lie entirely with the buyer, but I do ask for understanding with regard to the position of a good-faith supplier.

● The bunker industry is one of the few remaining businesses where buyers demand credit. An average bunker supply means a heavy burden on the f inances of the supplier. Suppliers sometimes have millions of dollars in outstanding credit for supplies. Buyers may be tax-haven single-ship companies, and the vessel leaves the territory immediately after taking the bunkers on board. In the present poor economic climate in the shipping industry, this is a very risky undertaking, with more owners and charterers disappearing into bankruptcy every day. Suppliers need to

Contact: Carel J H van LyndenAttorney-at-lawAKD RotterdamEmail: [email protected]

Legal Issues

Carel van Lynden looks at the contentious issue of T&Cs from a seller’s

perspective

Supplier, beware!


law, so as to create a possibility to claim against the vessel when the buyer does not pay. I will go into this in more detail under ‘Payment terms’.

Quality and quantity and samplingI do not understand why Ivar says that the seller has little or no responsibility unless he clearly describes merchantability of the product. First of all, I have never come across a case where the required quality was not specif ied. Secondly, there is an implied warranty of merchantability and f itness for purpose when a vessel orders bunkers. Where quantity and sampling are concerned, the buyer must simply instruct the vessel properly in this respect. Again, it is the buyer who chooses where the delivery is to be made. It is his responsibility to instruct his ‘representative’, who will be the master or chief engineer. What is so special about that?

Title and riskIt is a common condition to retain title until payment has been made. That makes perfect sense when no payment has been received

at that point in time. The vessel leaves the jurisdiction after bunkering. The buyer will be based in another country. When the buyer becomes insolvent, the only possibility to retrieve some of its money is through the bunkers. The idea that risk should pass to the buyer on physical delivery, likewise makes sense. How could the supplier retain the risk for bunkers in a vessel which has sailed away? I do agree that the clause providing that title will pass at an earlier stage than upon passing f lange or ship’s rail can be somewhat more debatable. But in my experience this is not a common clause.

ClaimsQuantity claims should normally be f iled immediately upon delivery. Such claims will be known at that point in time, and, because the vessel will sail away, that is the last opportunity for the supplier to check things with the vessel and the barge or terminal. Quality can, and will usually be, determined within a week, and it is fair to limit the claim period

‘Favourable provisions for a supplier, including limitation of liability, are

far from unique to the shipping industry’

because the possibility to check and take action quickly diminishes with time. It is the kind of clause which one sees in many other industries.

Force majeureForce majeure is a generally accepted principle in law. With or without a clause to this effect, a supplier will not be liable in a case of force majeure. In itself this is therefore nothing special. Force majeure clauses usually describe a series of events that would constitute force majeure anyway (e.g. war, f lood, earthquake, etc.). Every

contract in every industry will contain a force majeure clause.

Payment termsAs already mentioned, suppliers tend to invoice to half the world (master and/or owners and/or managers and/or agents et al.) The validity thereof is limited. An invoice cannot change contractual relations. Also, a charterer will usually have no authority to bind the owner and vessel. However, when the charterer does not pay, but the vessel has used the bunkers, certain systems of law give the supplier a lien against the vessel when the invoice is also directed to the master and owners or to the vessel. The theory behind that is that the bunkers have benefited the vessel and therefore the vessel is ‘liable’ for the value thereof, a ‘lien’ is created against the vessel. Thus, this is a form of protection in case the buyer does not pay. Why does the buyer (or, in this case, Ivar) complain about that? When the buyer pays there is no problem, is there?

I will concede that, once in a while, one sees conditions that go too far. But in my 30-plus years of experience with shipping, I cannot say that

I have the same bad feeling about sellers’ GTCs that Ivar seems to have.

Legal Issues


‘The ferry and short sea shipping companies

cannot possibly absorb such a hike in prices and

inevitably it will be passed on to their customers – if they are prepared to

accept it’

onto ships, by far the most environmentally positive means of transportation. It will also put these longer routes into jeopardy and we should expect some of them to close with resultant job losses at sea and in our ports. Rosyth, Newcastle, Teesport, Hull, Immingham are all potentially at risk – over 20 scheduled ferry and freight routes go in and out of those five ports alone, not to mention the others further south. Each of those routes carries between 50,000 and 120,000 trucks or trailers each year, depending on the route – do we really want those back on our roads, not to mention the job losses? From an environmental standpoint, this would also add over 40,000 metric tonnes (mt) of carbon dioxide (CO2)

a year per route closure. So, what are the options for short sea or

ferry companies operating in the ECAs post 2015?

Firstly, they could just switch to the low sulphur fuel and risk all the consequences of route closures and modal shift from sea to road that I have already outlined. That is, of course, if there is enough low sulphur fuel – and it should be noted that no refiner has made any investment for producing more of this type of fuel as they would prefer ships to continue using heavy fuel oil for which there are few alternative markets. The International Maritime Organization (IMO) has put in place a fuel availability study – but only to start work in 2018, as member states do not wish in any way to undermine the 2015 ECA regulations. One suspects that those same member states do not believe there will be enough fuel in 2015 – surely an unachievable regulation is a bad regulation unfit for purpose?

Secondly, they could carry on burning heavy fuel oil, which would keep the refiners happy, and fit scrubbers that remove the sulphur dioxide from the ships’ emissions. But these are big bits of machinery fitted quite high up in the ship and many ferries

The need to reduce emissions of sulphur from shipping for environmental and health

reasons is clear, unequivocal and fully supported by the shipping industry. Whilst the provisions of the International Convention for the Prevention of Pollution from Ships (MARPOL) are a welcome way to address this, they are set to create considerable financial, logistical, societal and even environmental impacts that will impose substantial hardship extending far beyond shipping companies.

The MARPOL regulations are complex and multi-faceted so, for the sake of simplicity, I will highlight just the two major clauses. Firstly, in 2015 an increase in the stringency of Emission Control Areas (ECAs) in the Channel, Baltic and North Sea and around the coast of North America. Within these ECAs, ships will be required to burn fuel with a sulphur content of less than 0.1%. Secondly, a global standard for all shipping in 2020, requiring a world-wide limit of 0.5% – if there is enough fuel available. A big if.

Why are we concerned?So, given our support for the aim of these important regulations, why are we concerned?

It is widely predicted that the low sulphur fuels, whether 0.5% or 0.1%, will add about 87% to the cost of current fuel. This is because it will be a refined rather than residual product.

We are particularly concerned in the near term with those vessels that will ply their trade exclusively within the European ECAs post-2015. So, for the UK that means the passenger and freight routes to and from our eastern and southern shores – particularly the longer North Sea routes. One cross channel operator has estimated that this will add €55 million ($71 million) to its annual fuel bill.

The ferry and short sea shipping companies cannot possibly absorb such a hike in prices and inevitably it will be passed on to their customers – if they are prepared to accept it.

Slender profit marginsWe know that most freight haulage companies work on slender profit margins so they will certainly look at other options. So, if they wish to transport freight from Teesport to Zeebrugge, for example, they may choose to take it by road to a shorter sea crossing to save costs. This would, of course, totally undermine the laudable efforts of the government to get freight off our roads and

Jonathan Roberts of Maritime UK argues that

ECA regulations could bring some unintended,

and undesirable, side effects

Environmental Issues

Hidden costs

Jonathan Roberts is the Public Affairs Manager of the UK Chamber of Shipping and the Maritime UK coalition.

Contact:Jonathan RobertsThe Chamber of ShippingTel: +44 20 7417 2800Fax: +44 20 7600 1534 Email: [email protected]: www.british-shipping.org


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‘Without an early uptake we will never get enough

scrubbers to sea to make a difference’

and smaller vessels either don’t have the space to fit them, or they would cause stability problems. For those that can fit them, the scrubbers also come with a huge price tag: $9 million for an average-sized vessel. Again, this is a cost that would have to be passed on. Furthermore, there have been significant teething problems with getting this technology to work at sea with sufficient reliability that it could provide the necessary regulatory certainty.

Thirdly, they could burn alternative fuels. This is very attractive for new build ships, but very complex and expensive to retrofit to existing vessels.

So what can governments do to help avert the unintended outcomes of these regulations?

Firstly, they can help to incentivise the early uptake of scrubbers. At present, there is no reason why a company should spend up to $10 million on a scrubber two-and-a-half years before the regulations come into

force – and yet without an early uptake we will never get enough scrubbers to sea to make a difference. We recognise this is not a time that we can realistically ask for financial incentives but it need not cost. For example, the government could support a mechanism whereby a company employing a scrubber ahead of the regulations could offset the lower than required emissions against other vessels post-2015. This is called averaging or banking.

Secondly, governments should support specific route exemptions (or ‘short term interim relief ’, which describes it rather better). This should be time-limited to 2020 and only apply to those services that cannot recuperate the additional cost in 2015, either by technical measures or by opting for the low sulphur fuel, and thereby risk reducing their operations, generating a modal back shift, which is worse to society than the difference between and 0.1% sulphur fuel and the present limit in ECAs of 1%.

Environmental Issues


‘Singapore has stayed ahead of the curve by

setting new benchmarks and by being among the first to introduce

international standards’

The Singapore Standard Code of Practice for Bunkering – SS 600:2008, which covers pre-delivery, actual delivery and post-delivery checks and documentation, is the only set of documented detailed bunkering procedures in the world. SS 600:800 was developed for the benefit of the ship bunkering industry in Singapore. Although following all the procedures can be a challenge for the ship operator, especially in areas such as ensuring that a proper set of samples is taken, not adhering to these sampling procedures effectively means that such fuel samples will not be valid should a dispute between the fuel recipient and the supplier arises.

Given the soaring oil prices, bunker quantity is now more important than ever as parties do not want to lose a single drop of oil. As a result of this need to ensure that the correct quantity of bunker is delivered, DNVPS has seen a surge in demand for its bunker quantity surveyors over the last years.

Fuel quality is important because bunkers are used to meet the energy needs of the vessel. To this end, Singapore has stayed ahead of the curve by setting new benchmarks and by being among the first to introduce international standards.

With ‘dark clouds’ looming on the horizon because of the European debt crisis, economic slowdown in the United States and China, Singapore’s economy is expected to soften but it is likely – as has happened many times in the past – to have adequate protective measures in place. Conditions for the bunkering industry will, therefore, remain challenging.

As a responsible leader in the bunkering industry with strong links to the working groups of key bunkering and shipping industry bodies, DNVPS aims to support and promote the interests and growth of the bunkering community – and the wider shipping industry – through active participation and leadership. Going forward, DNVPS is cautiously optimistic about recovery in the shipping industry, and looks forward to supporting continued and sustainable growth in the bunkering sector.

As one of the world’s premier hub ports offering the shipping industry seamless global trade

connectivity to 600 ports in over 120 countries, Singapore is in a unique position, with a breadth and depth of maritime services that few can match. It is the largest and most important bunkering port in the world, with more than 40 million metric tonnes (mt) of bunker fuel lifted in the past year.

In the same vein, DNV Petroleum Services (DNVPS), a leader in marine fuel management, with two-thirds of the world-wide market share for contracted fuel quality testing services and a major provider of bunker quantity surveys, has been an integral part of the Singapore growth story. Recognising Singapore’s quality, efficiency and reliability that have helped it attain its status as the preferred international port of call, DNVPS relocated its headquarters from London to Singapore in 1992.

Since DNVPS maintains the biggest bunker quality database in the maritime industry, it is able to leverage technology and data analytics to provide insightful fuel quality trends and patterns to its clients and the shipping community. DNVPS also prides itself on its team of well-trained surveyors and offers the most comprehensive bunker quantity survey service of its kind in the industry.

In addition, DNVPS and Alfa Laval Tumba AB, experts with several years of experience, have been conducting fuel management courses at various locations around the world. The course is relevant to all parties in the entire bunker chain as it covers the whole spectrum of fuel-related problems. Past participants include seafarers, shore-based, technical and operational staff, as well as suppliers, traders and purchasers.

Singapore’s dynamic bunkering industry presents both exciting opportunities and challenges, especially in view of growing competition from ports in the region and around the world.

The implementation of the new North American Emission Control Area (ECA) with its stricter control on the emission of sulphur oxides for ships, presents an opportunity for the supply of bunker fuel with a maximum of 1.00% m/m sulphur content even from ports outside the ECA, such as Singapore. This is a growing market and being able to ensure the delivery of the right quality and accurate quantity of bunkers at an attractive price could play an important strategic role in the development of the bunkering scene in Singapore.

Fuel Testing

Eirik Andreassen of DNVPS gives his

perspective on Singapore bunkering

Riding out the storm

Eirik Andreassen is the Managing Director of DNV Petroleum Services (DNVPS) The DNVPS operation encompasses a global network of customer service offices and five specialist fuel laboratories strategically located in Singapore, Rotterdam, Oslo, Houston and Fujairah. DNVPS provides ship operators and charterers with total fuel management solutions, delivering measurable improvements to risk management, cost and operational efficiency, and compliance with regulatory requirements.

Contact:Eirik AndreassenDNV Petroleum ServicesTel: +65 6508 3750Fax: +65 6779 7949Web: ww.dnvps.com


‘The first half of 2012 saw the shipping world

preparing for one of the biggest shifts in

regulatory limits since the introduction of MARPOL

Annex VI’

Michael Green of Intertek Lintec Shipcare Services

flags up fuel quality concerns that have

emerged in the second quarter of 2012

Fuel Testing

Cause and effect

Michael Green is the Technical Manager with Intertek Lintec Shipcare Services, which offers a global submitted marine fuel-testing programme.

Contact:Michael GreenIntertek Lintec Shipcare ServicesTel: +44 1325 390 180Fax: +44 1325 460 055Email: [email protected]: www.lintec-group.com

Intertek Lintec ShipCare Services over the years, the figures have suggested that on average one bunkering in every five is likely to be off spec. In quoting this particular figure it is vital to note that when a fuel is stated as being off spec this is in relation to the particular grade of fuel as stated by the International Organization for Standardization’s ISO 8217 fuel standard against which it is tested.

It is also imperative to be aware that when a fuel is stated as being off spec it does not mean that the fuel is unfit for use. In the majority of cases, off spec reports relate to minor issues, such as density or viscosity variations, which can be rectified by efficient onboard treatment.

However, from the samples submitted for analysis in the second quarter (Q2) of 2012, it would now appear that almost one bunkering in every four is likely to be considered off spec.

So, when faced with this statistic, the question to be asked is: ‘What is the root cause of such a dramatic change?’

The immediate and most probable

Fluctuations in marine fuel quality and legislative reform go hand in hand. Any significant shift in

regulatory sulphur limits cannot help but affect the overall quality of both residual and distillate fuels available for purchase.

The first half of 2012 saw the shipping world preparing for one of the biggest shifts in regulatory limits since the introduction of MARPOL Annex VI.

The North American Emission Control Area (ECA) is estimated to cover more than six million square kilometres (km2) and has forced fuel suppliers the world over to examine their capabilities as far as the supply of suitable fuel is concerned.

These considerations have not simply been limited to the impending surge in demand for 1.00% sulphur heavy fuel oil (HFO), but also with regard to the forthcoming changes in 2015 and the step down to 0.1% sulphur fuels for use in emission control areas.

Quality trends in recent years have seen a gradual creeping increase in supply of off spec fuels – and as emission legislation continues to evolve this progression is unlikely to alter.

In looking at the transition from 2011 to 2012 and the implementation of the 1 August 2012 implementation date of the North American ECA we can see that there has been a marked increase in the overall percentage of global off spec fuel samples.

Although a steady increase has been witnessed, a jump of around 2.5% during a three-month period is bound to make people sit up and pay attention.

In looking at the samples submitted to


‘Quality trends in recent years have seen a gradual

creeping increase in supply of off spec fuels –

and as emission legislation continues to evolve this

progression is unlikely to alter’

‘From the samples submitted for analysis in the second quarter of 2012, it would now appear that almost one bunkering in every four is

likely to be considered off spec’

When examining a greater range of regional figures, it becomes apparent that significant fluctuations have occurred in a number of key bunkering locations across the world.

In looking at total regional off spec figures for Q1 and Q2, significant increases have been seen in the Baltic, Western Europe, West Africa, North Africa and the European Mediterranean.

All of the above mentioned regions share a common factor in that they support a large number of bunkering ports used for Trans Atlantic trade routes. This, coupled with the fact that the increase in off spec samples relates to test parameters such as density, viscosity, sulphur and water, adds a greater degree of clarity to the situation.

As we already know, change in environmental legislation has a significant effect on the demand for lower sulphur fuels and as a result it also affects the supply chain that is responsible for providing those fuels.

Higher levels of fuel treatment and increased blending operations undoubtedly lead to fluctuations in quality and it comes as no surprise that a surge as large as this has been seen in the build-up to the implementation of the largest control area to date.

response is likely to be the enforcement of the North American ECA, but is it fair to assume that this is indeed the case?

The only way to be able to fully examine the overall change is to look at specific regional variations in an attempt to see where significant fluctuations in quality have occurred.

If the implementation of the North American ECA is believed to be the root cause of the issue, then it would stand to reason that significant variations would be expected in and around the major US ports.

However, when the figures are examined this appears not to be the case. If we compare the total number of ‘off spec’ samples seen in US ports in Q1 2012 with those in Q2, we can see that overall variation is limited, and as far as the US West Coast ports are concerned the figure is actually reduced.

If we look at US East Coast ports, for instance, we can see that approximately 15.9% of all samples submitted in Q1 2012 showed one or more parameters in excess of the limits stated within ISO 8217 compared with 15.3% in Q2.

This being the case, we must look further afield to see what could possibly explain the overall global increase.

Fuel Testing

Off spec fuel statistics for global regions

Region % Off specs Q1 2012 % Off specs Q2 2012

Baltic 18.3 22.5

Euro Mediterranean 24.0 26.3

North Africa 23.0 37.3

West Africa 31.7 46.6

Western Europe 26.9 30.3

Region % Off spec Q1 2012 % Off spec Q2 2012

US East Coast 15.9 15.3

US West Coast 20.0 17.0

US Gulf of Mexico 17.5 17.2

Off spec fuel statistics for US regions


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The system’s effectiveness is guaranteed as it compares actual data measured with the estimated values. In addition, the actual values measured are analysed automatically by the system.

Reducing environmental burdenClassNK believes that the scheme will reduce the environmental burden and strengthen international competitiveness. Improved levels of fuel consumption are expected during operations in actual seas, so we can say that the scheme will allow the development of ships that reduce the environmental burden. In addition, ClassNK believes that shipyards will be able to provide ships with high added value, leading to a strengthening in competitiveness internationally.

This is one of a number of many research projects with which ClassNK is taking a major role. As of July 2012, 87 joint research

ClassNK is at the forefront of a unique Japanese industry initiative to analyse vessel

performance in all sea conditions. The society is collaborating with

NAPA, Imabari Shipbuilding Co. Ltd and Sayonas Shipbuilding Co. in a joint research project in which the energy saving operation support system, ClassNK-NAPA GREEN, has been installed on vessels built by each company to gain data on the relationship between draft, trim, main engine output, vessel speed and weather conditions.

Data retrieved will be used to upgrade vessel design, thereby strengthening international competitiveness and reducing the environmental burden. The implementation period of the full-scale ship test is scheduled to take three years.

ClassNK has cooperated before with Imabari Shipbuilding to provide the most comprehensive solution for the Ship Energy Efficiency Management Plan (SEEMP) but the current project differs completely from the previous one.

Feedback schemeThe main objective is to develop a feedback scheme, using ClassNK-NAPA GREEN, which has been developed in response to the entry into force from 2013 of regulations on carbon dioxide (CO2) emissions for international shipping and the sudden rise in oil prices.

The partnership between ClassNK and NAPA, the global leading software solution provider for ship design and operations, offers a dynamic total solution for shipowners and operators targeting a reduction in fuel expenses and CO2 emissions and optimisation of efficiency during ship operations.

Fuel consumptionClassNK-NAPA GREEN collects and monitors, on a broad scale, the information related to ship operations, including the engine rotation speed/output and fuel consumption, hull attitude, meteorological and oceanographic information. It then automatically analyses the causes of changes in ship performance and fuel consumption. Furthermore, and based on the results obtained after this analysis, it automatically adjusts the ship performance model by combining it with actual performances achieved during operations, consequently increasing the estimation accuracy for optimal operating conditions.

The ClassNK-NAPA GREEN solution is already available and it will be developed further, based on a wide range of tests

Yasushi Nakamura of ClassNK gives a progress report on a new research

project into vessel performance at sea

Research and Development

Yasushi Nakamura is the Executive Vice President and General Manager of ClassNK, the world’s largest classification society.

Contact:Yasushi NakamuraTel: +81 3 3230 1201Fax: +81 3 5226 2012Web: www.classnk.or.jp


‘Data retrieved will be used to upgrade

vessel design, thereby strengthening international

competitiveness and reducing the environmental

burden’

Energy Efficiency Design Index (EEDI) and are performing various related activities. In addition, as a system supporting the Energy Efficiency Operational Indicator (EEOI) calculation we are providing the PrimeShip-GREEN/EEOI to shipowners.

PrimeShip-GREEN/EEOI is a system used for the calculation and analysis of the EEOI of a vessel in order to check CO2 emission levels during operation and it is based on International Maritime Organization (IMO) guidelines (MEPC.1/ Circ.684).

Users can visually confirm variations in energy efficiency and its contributing factor by displaying EEOI calculation results in a trend chart. PrimeShip-GREEN/EEOI is expected to help facilitate the improvement of the energy efficiency of ships.

Accordingly, ClassNK is playing a leading role in issues such as the reduction of CO2 emissions and improved fuel consumption during ship operations.

projects were being conducted in regards to industry requests for joint research. The content of the research covers a wide range and is related to reducing vessel fuel consumption and oceanic development and this content corresponds to all conventions in force.

Catalyst for changeAs a neutral third party, ClassNK performs activities that are a catalyst in research and development projects in the maritime industry.

In particular, national research and development projects related to the development of carbon dioxide (CO2)emissions reduction technology are being conducted with the technical and f inancial support of ClassNK playing a central role in collaboration with the government and the maritime industry.

We have carried out certifications on a number of ships with regard to the

Class actResearch and Development


up production of LSFO in the Russian Far Eastern ports to bunker vessels going the United States and Canada. Rosneft Marine is also planning to deliver LSFO to the ports of South Korea, Japan and China to meet the growing demand on this grade in these regions.

Furthermore, Rosneft Marine and RN-Bunker are also establishing a quality management standard for the bunker supply chain in their ports in order to meet the regulatory requirements. Rosneft Marine will also soon commence bunkering on Sakhalin Island.

In the current situation, credit is a vital component in running a successful business, This is where suppliers must first look at supporting their customers by extending credit coverage duration, and offering a cost effective and operationally efficient fuel procurement strategy based on transparency and trust. With the aim of offering flexibility to its clients, Rosneft signed an agreement with Sakhalin Energy Investment Company in October 2011 to supply five liquefied natural gas (LNG) carriers in the Russian Port of Nakhodka on a fixed term formula contract, which guarantees consistent quality, volumes and better prices at both ends.

As priorities in fuel blending have shifted in the light of the regulatory developments which have led to an increasing demand for LSFO, some fuel suppliers have taken to using alternative blend components that may not necessarily be optimal for ships’ engines in the long run – as they may not have been optimised for stability and performance despite meeting regulatory standards. Does this leave us to look for other options to fill the demand gap?

LNG has a lot of potential but it is too soon to declare it a future fuel. Distillates are clearly an expensive proposition, considering a substantial amount will be needed to fuel the demand by 2025. There are many unanswered questions about the supply network, storage, infrastructure, and the return on investment (ROI), as well as health and safety. Abatement technology is still an intermediate solution and it is under consideration as a viable option by the IMO.

While 2013 is going to be a challenging year, it has the potential to mark a continued and unprecedented shift in the dynamics between suppliers and their customers. With a continued drive into a new era of professionalism and standardised procedures, there is room for transformation, growth and innovation that will secure the future prosperity of the shipping industry.

Marine fuel suppliers have little to fear from the latest changes in emissions reduction

regulations that came in to force in 2012, but they are already preparing for the seismic shifts that promise to reshape the market over the next few years.

Undoubtedly, the year commenced with a grim forecast that spoke of trying times ahead for the shipping sector. Shipowners and operators have had to work hard to adapt to the stricter regulation regime on emissions implemented by the International Maritime Organization (IMO) in the North American Emission Control Area (ECA) zone as of 1 August 2012. These pressures will multiply with the Caribbean ECA coming into play in 2013. However, the challenges will be far greater when the ECA sulphur limit falls to 0.1% in 2015.

While these regulatory developments have been warmly welcomed by environmentalists and governing bodies, there has been a sentiment of speculation and discomfort among the vessel owners and operators.

With changing times, suppliers expect to face a number of challenges such as: producing more low sulphur fuel oil (LSFO) in order to meet the industry demand; building new physical assets; managing the supply chain and upgrading existing refineries to meet the global demand for compliant fuel. It is noteworthy that the smaller players are being forced to exit the market as they do not have the financial strength to achieve operational and technological excellence. In addition, high bunker prices and further restrictions on credit and capital investments have triggered discomfort among the shipowners and operators with regard to profitability in the business.

The future of companies in the bunker sector is defined by how they evaluate these tough challenges and turn them into business opportunities. However, this presents opportunities for leading fuel suppliers to add value to their customers by providing solutions to these challenges. Suppliers who have the requisite financial muscle and operational capacity can overcome the production challenges of LSFO, and help their clients implement effective strategies that ensure a reliable supply of high quality fuel at competitive prices, with operational excellence, risk management techniques and in-depth technical process of switching fuels to avoid any potential hazards.

Rosneft Marine, as a subsidiary of a huge Russian oil company, has such opportunities. For instance, it has already set

Business Perspectives

As maritime and bunkering communities

face up to the operational, financial

and legislative hurdles posed by environmental

regulations, Rosneft discusses how these

challenges can be turned into opportunities

Leading the way


‘The bunker industry has become more professional. Modern business practices

and tools have been adopted and technical

innovation has helped to improve the handling and delivery of fuel products’

considerable benefits for bunker traders and customers. However, throughout this process, bunkering has also become far less personalised. In today’s acutely challenging market conditions, this can be an issue.

In too many cases, we see traders restricted from using their discretion and instincts. Processes and systems can get in the way of building human relationships and taking the initiative.

On top of this, the interaction between traders, suppliers, customers and other supply chain partners has become more formal, more transactional and less personal. Trust seems to be a commodity that is valued less and less. Of course there is a balance to be struck. But in my view, the pendulum has swung too far towards a reliance on process, and too far away from a personalised approach to meeting customers’ needs and solving their problems for them, whatever it takes. This needs to be redressed.

I believe that the loss of the human touch in bunkering has impaired our ability to find the best solutions for customers. Too many traders are constrained by their internal business processes and over-reliant on the tools that they use. They don’t draw enough upon their judgement, their experience and their relationships with suppliers, brokers and customers.

The key question is how this affects the job that we do every day for customers. And how we ensure that our customers can rely on us to find solutions for them. They want to work with traders that they know and trust to get the job done, every time. When they approach a trader with their requirements, the response they want to hear is: ‘Leave it with me and I’ll sort it out.’ No ifs or buts. That is what going back to the traditional roots and values of bunkering is all about.

The same approach extends to lines of credit and risk management. Customers are under no illusions about the disparity between the credit terms they want and the

The human factorCustomer Relationship Management

Lars Møller argues that the bunkering industry

needs to look to its traditional values in

order to meet today’s challenges

In today’s market, shipowners and operators have a lot to think about when it comes to securing the fuel

they need at the right time, in the right location and at the right price. In the bunker industry, it’s our job to find solutions to these challenges. Whether it’s rising fuel prices, tighter regulations, concerns over fuel quality, a lack of credit and liquidity, or product availability. All our customers want to hear is that we can get the job done, no matter what.

So how should we approach this challenge?

The bunker industry has changed in many ways in recent years. For one, it has become more professional. Modern business practices and tools have been adopted and technical innovation has helped to improve the handling and delivery of fuel products.

These changes have been largely positive. The industry is far better equipped to meet the demands of customers in 2012 and beyond, as well as the expectations of the wider shipping world.

However, despite this progress, I believe that something is missing. It doesn’t lie in further technological advances, new financial tools or management processes. It lies in going back to the roots of bunkering. Not in a regressive way, but by rediscovering the human touch in our working relationships. Recapturing the high-energy, dynamic environment of trading. Working with customers and partners based on trust, and going the extra mile. And operating to the simple philosophy of delivering on the promises that you make.

Historically, bunkering was a fragmented, localised business. In response to the demands of a global shipping industry, it was inevitable that the bunker industry would not only consolidate – with the emergence of a number of global suppliers – but would also modernise.

We now have far more sophisticated customer relationship management (CRM) processes and greater specialisation of roles within bunker companies. To offer customers a more consistent quality of service, wherever in the world they are, bunker companies have sought to impose a single set of policies, processes and standards. In an increasingly complex, volatile energy market, we also have far more sophisticated tools for fuel trading, which can be used to deliver risk management products that are tailored to the particular needs of customers and their appetite for risk.

The evolution of bunkering into a global ‘one-stop-shop’ service has brought

Lars Møller is the Chief Executive Officer (CEO) of Dynamic Oil Trading, a new global trading company for marine fuels and lubricants. Launched in September 2012, Dynamic Oil Trading is headquartered in Singapore and operates globally, with plans to expand further into Asia, Europe and the Americas. It provides the full range of fuel oil and lubricant products, as well as advanced risk management services and a specialist offering to the yacht industry.

Contact:Lars MøllerDynamic Oil TradingEmail: [email protected] Web: www.dynamicoiltrading.com


Commodity trading involves risks, and you should fully understand those risks before trading.

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‘In too many cases, we see traders restricted from using their discretion and instincts. Processes and systems can get in the way of building human

relationships and taking the initiative’

Our industry has made tremendous steps forward in recent years. We must continue to embrace technical and commercial innovation in all aspects of what we do. But when it comes to the human factor, it is time to go back to basics, as well as instilling a creative, can-do attitude at the heart of the services that we deliver.

Customer Relationship Management

payment terms sought by suppliers. However, the ability to pick up the telephone to discuss these issues with a trusted trader, rather than relying on an algorithm to dictate the terms of the transaction, is critical. Customers need a trader that is firstly well financed and has capital, but also understands their business and has the trust and confidence of all parties to get the deal done. After all, trust leads to transparency. This in turn provides a more honest and a straightforward foundation for doing business.

A similar example can be found in the banking industry. A few years ago, your bank manager was on your speed dial. You could call them up or walk into the bank to discuss your finances. Your bank manager was someone you could trust. Following globalisation, everything – understandably – became automated, distant and process-driven. That personal relationship was lost.

Since the global economic crisis and the

pressure on the banking industry, many high street banks have responded by restoring a more personal bond between customers, their local branch and their bank manager. They are facing calls for a return to traditional values and smaller, simpler institutions that place a human touch and a personal relationship at the heart of their dealings with customers.

In the face of the challenges facing global shipping, the same case can be made for the bunkering industry.

Back to basicsI believe that bunkering’s traditional values can be an important part of the solution to today’s challenges.

The task for bunker companies is to nurture the instincts of their traders. To give them the freedom to go the extra mile to meet their customers’ needs, whatever the challenge. And to encourage them to invest in building strong relationships.


Reiter Petroleum Inc.Reiter Petroleum Inc.Reiter Petroleum Inc.Les Pétroles Reiter Inc.Les Pétroles Reiter Inc.Les Pétroles Reiter Inc..................................................................................................................................................................................Reliability. Professionalism. Integrity.Reliability. Professionalism. Integrity.Reliability. Professionalism. Integrity..................................................................................................................................................................................

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Telephone: (507) 265 2634 (507) 265 1277Fax: (507) 265 3727

Email: [email protected]: www.quinnoil.com

Networking

On the move... EuropeChristel McLoughlin, previously at Torm and Statoil, has been appointed Director of Risk Management Products at KPI Bridge Oil in London. Tel: +44 7799 4420; Mob: +44 7880 062132; Email: [email protected].

Johnny McIlroy, previously with Platts, Infospectrum, MRC and Peninsula Petroleum, has joined Cockett Marine Oil in the UK as Group Credit Manager. Tel: +44 1689 883 447; Mob: +44 778 562 1953; Fax: +44 1689 877 666; Email: [email protected].

Andy Boichat is now Senior Bunker Trader at GAC Bunker Fuels in London. Mob: +44 78 2701 4279; Email: [email protected].

Intermediate Fuel Oil Ltd has relocated to 2 New Cottages, East End, Paglesham, Rochford, Essex SS4 2ED, United Kingdom. Tel: +44 1702 257190 / 257170; Fax: +44 709 220 8615; Mob: +44 776 668 3101.

Elin Vold Agren has joined Bergen Bunkers AS as a bunker trader. Tel: + 47 5560 6212; Mob: + 47 9514 3146; Email: [email protected].

Oscar Obregon has joined A/S Dan-Bunkering Ltd as a bunker trader in the company’s Copenhagen office. Tel: +45 3345 5410; Direct: +45 3345 5442; Mob: +45 4252 1155; Fax: +45 3345 5410; Email: [email protected].

Max Christian Boas has joined Global Risk Management as Business Process Coordinator in Middelfart, Denmark. Direct: +45 8838 0011; Mob: +45 6037 5407; Email: [email protected].

Global Vision Bunkers Group has relocated its head office to Drieluik 5, 2907ZA Capelle a/d Ijssel, Netherlands and appointed Angela Beyens, previously at OW Bunker and Transcore Energy, as a bunker trader. Tel: +31 10 441 2745; Mob: +31 65 568 8492 (nl), +32 477 18 24 23 (be); Fax: +31 10 441 3429; Email: [email protected].

Reginald Robyn, previously Managing Director at Bunkers at Sea in Antwerp, has joined Bomin Deutschland GmbH & Co. KG as Director Logistics and Offshore Development Bomin Group. Tel: Tel +49 4035 0930.

Jacopo Pigliapochi has joined Dan-Bunkering (Monaco) S.A.M. as a bunker trader. Tel: +377 9777 5401; Direct: +377 9777 6326; Mob: +377 6 4062 7659; Email: [email protected].

Africa & MideastGAC Bunker Fuels has relocated its headquarters to 24th Floor, Jumeirah Business Centre, Cluster G, Jumeirah Lake Towers, P.O. Box 17041, Dubai. Nicholas Browne is Global Director of Bunker Fuels. Direct: +971 4 435 3288; Mob: +971 5665 699 14; Email: [email protected]. Two bunker traders have recently joined the company in Dubai – Georgia Paravalou (Tel: +971 4 435 3287; Email: [email protected])

and Anthony Inglis (Mob: +971 54 216 3394; Email: [email protected]).

Cockett Marine Oil DMCC has relocated to Office A, 7th Floor, Silver Tower, Jumeirah Lakes Tower, PO Box 625751, Dubai. Tel: +971 4 421 4900; Fax: +971 4 421 4903.

Koen Korstiaan den Boogert has joined International Bunkering in Dubai as a bunker trader. Tel: +971 4 437 1700; Mob: +971 55 495 6476; Email: [email protected].

Mohammed Al Sari has replaced Mohammed Osman as the general manager of FAL Oil in the United Arab Emirates.

Asia PacificTotal Oil Asia-Pacific Pte Ltd has appointed Steve Goh, previously at Bomin, as a senior bunker trader in Singapore. Tel: +65 6849 4303; Mob: +65 9672 1076; Fax: +65 6338 8386; Email: [email protected].

Karen Moon has joined International Bunkering in Singapore as a bunker and lubricant trader. Tel: +65 6275 8861; Mob: +65 9129 8877; Email: [email protected].

Dena Kong has joined Dan-Bunkering’s Beijing office in China as Marketing Executive. Tel: +86 10 5989 2182; Mob: +86 139 1083 8734; Email: [email protected].

AmericasAllen Meyer has joined Kansas-based Multi Service as an Account Manager. Tel: +1 913 663 9601; Mob: +1 913 213 8586; Email: [email protected].


increasingly hostile debate. Among the highlights will be presentations on cross border anomalies in the treatment of bunker fuel and the legal framework for current upset in the bunker industry. Fuel quality procedures in the Port of Antwerp will be examined, while the Dutch police will try to explain the reasons for their dogged adherence to the law that states that any debunkered fuel has to be treated as chemical waste, regardless of whether or not it is useable elsewhere. The plight of the Dutch and Belgian suppliers will be brought to the fore, with the debate expected to be fiery. Whether or not chemical waste is being dumped into bunker fuels in the ARA – no criminal cases have yet been prosecuted – the screening of bunker fuels for waste chemicals will be debated, as will the process of debunkering and the disposal of chemical waste.

The second major theme for The Bunkering Symposium is the gathering momentum of LNG as a future fuel for shipping. Much work has been done to establish the fact that LNG has the ability to become a safe, clean, inexpensive and therefore highly attractive alternative fuel for shipping.

Only recently the barriers to entry appeared almost insurmountable; now a fully-fledged LNG bunkering infrastructure and flourishing LNG marketplace may soon be a reality. This session moves on from the age-old question of ‘if ’ LNG can become a viable bunker fuel and looks at the some of the many exciting initiatives that – much sooner than many may have expected – will transform the bunker markets throughout Europe and the rest of the world.

The LNG session will look at overcoming outstanding safety issues and other regulatory matters and the practicalities of embracing LNG as a clean and economical fuel for shipping. The ports of Rotterdam and Antwerp will outline their plans for LNG infrastructure in the ARA, while some of the fleet-footed proponents of using LNG as a bunker fuel will present their plans for LNG breakbulk storage, setting up a European supply and trading network and using smaller LNG ship bunkering terminals. Operational issues, such as LNG quantity measurement, will also be examined and debated.

The Bunkering Symposium is not only known for the level of discussion that it creates, but also for its social highlights, including a spectacular opening reception and dinner and an exclusive dinner and dancing celebration in the heart of medieval Antwerp.

Hot debateEvents

Llewellyn Bankes-Hughes previews the Bunkering

Symposium 2012, an event that has gained a

reputation for in-depth analysis and often heated

debate

The Bunkering Symposium is a unique forum created to promote active delegate engagement and frank,

lively debate on the ‘hottest’ issues of the day in bunkering. This year’s event, in Antwerp at the end of November, boasts another impressively topical programme that will examine supply and demand shifts and the continuing financial meltdown in shipping, the emotive issue of ‘chemical waste’ in bunker fuels and the way that the authorities are dealing with debunkering and waste disposal, and the inexorable move towards using liquefied natural gas (LNG) to fuel ships as the momentum swings from ‘if ’ to ‘when’ and ‘how’.

The Amsterdam-Rotterdam-Antwerp (ARA) region is the biggest and most important industrial and maritime hub in Europe. What happens here in oil, shipping and bunker markets often provides a fair guide to what is happening elsewhere in Europe and beyond. The event will open by examining the big picture, looking at the fundamental changes taking place and influencing the oil and shipping markets in the ARA, from oil supply and demand to refining and storage, from shifting shipping patterns to credit issues and the availability or otherwise of finance to oil the wheels of the business on which the region depends. The opening papers will investigate oil supply and demand, focusing on refining and storage, fuel imports and big-volume exports from the ARA. Key speakers will examine the parlous state of the shipping markets and look at how the industry is coping with the continuing credit crunch. Financial issues, including the role of the banks, will be covered in depth.

The most eagerly anticipated sessions of The Bunkering Symposium will focus on bunkering procedures and what many ARA suppliers perceive as unwarranted interference by the authorities which, many believe, could seriously undermine the industry. Unilateral changes to the fiscal status and treatment of bunker fuels among different countries are causing havoc for suppliers trading in neighbouring markets. Any threat to the long-term survival of the industry has to be taken very seriously, but as different taxes and different rules are applied in different jurisdictions, suppliers and buyers are in danger of falling foul of the authorities and the bunker business is in danger of paralysis. There will be a strong focus on the Netherlands and Belgium, where the issues of defining and identifying ‘chemical waste’, debunkering and dealing with debunkered fuel are now the subject of fierce and

The Bunkering Symposium 28-30 NovemberThe Hilton, Antwerp, Belgium

The Bunkering Symposium takes place every second year in Antwerp, Belgium and is presented by Bunker Events Limited, a joint venture between Petrospot and Vergo Consultancy, creator of the Bunker Experience training course in Rotterdam.

Contact: Nick LeaderTel: +44 1295 814455Email: events @petrospot.comWeb: www.bunkeringsymposum.com


NETHERLANDS: LNG Bunkering Summit 201328-30 January, AmsterdamContact: Carly Greene, IQPCTel: +44 20 7368 9300Email: [email protected]: www.lngbunkeringsummit.com

SOUTH AFRICA: Maritime Week Africa28 January-1 February, Durban Contact: Osei Mitchell or Maria Tierney, PetrospotTel: +44 1295 81 44 55Email: [email protected]: www.maritimeweekafrica.com

FEBRUARY

MOZAMBIQUE: Indian Ocean Ports & Logistics27-28 February, Beira Contact: Transport Events Management LtdTel: +60 87 426 022Fax: +60 87 426 223 Email: [email protected]: www.transportevents.com

MARCH

UNITED STATES: Shipping 201318-20 March, StamfordContact: The Connecticut Maritime AssociationTel: +1 203 406 0109 Email: [email protected]: www.shipping2013.com

APRIL

UNITED STATES: Maritime Week Americas29 April-3 May, MiamiContact: The Petrospot Events TeamTel: +44 1295 81 44 55Email: [email protected]

MAY

UNITED KINGDOM: The Oxford Bunker Course20-24 May, OxfordContact: The Petrospot Events TeamTel: +44 1295 81 44 55Email: [email protected]: www.petrospot.com/oxford

JUNE

NORWAY: Nor-Shipping4-7 June 2013, OsloContact: Nor-Shipping organisersTel: +47 66 93 91 00Email: [email protected] Web: www.nor-shipping.com

Events

Events Diary OCTOBER

SINGAPORE: SIBCON16-19 October, SingaporeOrganised by the MPA and managed by IBC Asia.Contact: IBC AsiaTel: +65 650 82401 Web: www.sibconsingapore.com

SWEDEN: LNG Fuel Forum31 October - 1 November, StockholmContact: Informa Maritime EventsTel: +44 20 7017 5510 Email: [email protected] Web: www.informamaritimeevents.com

NOVEMBER

UNITED ARAB EMIRATES: The Oxford Bunker Course (Advanced)4-6 November, DubaiContact: PetrospotTel: +44 1295 81 44 55Email: [email protected]: www.petrospot.com

UNITED ARAB EMIRATES: Petrospot Marine Surveying5-6 November, DubaiContact: PetrospotTel: +44 1295 81 44 55Email: [email protected]: www.petrospot.com

UNITED ARAB EMIRATES: IBIA Annual Convention6-8 November, DubaiContact: Charlotte Egan, IBIAEmail: [email protected]: www.ibia.net

NETHERLANDS: European Ports & Shipping Conference19-20 November, AmsterdamContact: United Market InsightTel: +36 1 445 2269Email: [email protected] Web: www.umievents.com

BAHRAIN: Trans Middle East 201220-21 November, Bahrain Contact: Transport Events Management

Tel: +60 87 426 022Email: [email protected] Web: www.transportevents.com

NETHERLANDS: Intermodal Europe 201227-29 November, Amsterdam Contact: Gillian McGuigan, IIR ExhibitionsTel: +44 20 701 76366Email: [email protected]: www.intermodal-events.com

UNITED ARAB EMIRATES: Seatrade Middle East Maritime27-29 November, DubaiContact: Richard Johnson, SeatradeTel: +44 1206 545121Email: [email protected]: www.seatrade-middleeast.ae

BELGIUM: The Bunkering Symposium28-30 November, Antwerp Contact: Nicholas Leader, PetrospotTel: +44 1295 81 44 55Email: [email protected]: www.bunkeringsymposium.com

DECEMBER

SPAIN: Platts Mediterranean Bunker Fuels Conference3-4 December, BarcelonaContact: Simon Kears, PlattsEmail: [email protected]: www.platts.com/events

PANAMA: TOC Americas4-6 December, Panama Contact: TOC EventsTel: +44 20 7017 7019Web: www.tocevents-americas.com

JANUARY

NETHERLANDS: European Oil Storage Conference21-22 January, AmsterdamContact: Andrew Kinash, PlattsTel: +44 20 7176 6227Email: [email protected]

GHANA: Oil and Gas Infrastructure Security21-24 January, AccraContact: Hanson WadeTel: +44 203 141 8700Email: [email protected]: www.oilandgas-security.com

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