brave new world - bunkerspot€¦ · seagas is the first lng bunkering vessel of its kind, and on a...

INDEPENDENT INTELLIGENCE FOR THE GLOBAL BUNKER INDUSTRYwww.bunkerspot.com Volume 10 Number 3 June/July 2013

Inside:• Offshore bunkering• Environmental Issues• US Oil Sanctions• Credit Management• News & Events

BRAVE NEW WORLD:Are bunker suppliers the new banks?

bunkerspot June/July 2013 www.bunkerspot.com 3

FEATURESCOMMERCIAL ISSUESChris Thorpe assesses the factors that can trigger dramatic oil price swings 22Bunker suppliers must be proactive in responding to a rapidly evolving US energy market, says Rob Atkinson of KPI Bridge Oil 24

EMISSIONS MONITORINGHelena Athoussaki, CEO of Carbon Positive, looks at how measuring ship emissions can be standardised and simplified through a process of monitoring, reporting and verification 26

ENVIRONMENTAL ISSUESDavid Bolduc of Green Marine outlines the programme’s strategies for increasing environmental awareness within the maritime sector 28

ENVIRONMENTAL REGULATIONSSerge Dal Farra of TOTAL Lubmarine looks at how new developments in the bio-lubricant market are helping shipowners to maintain their environmental commitments 30

CREDIT ISSUESJohn Phillips of Awyr Las stresses the importance of undertaking a regular review of T&Cs 31Felix Yamasato of Peninsula Petroleum provides some essential guidelines for sound credit management 32

REGIONAL FOCUSAdrian Tolson of OW Bunker reviews offshore bunkering activity in the Gulf of Mexico 34

TRADE SANCTIONSUS trade sanctions against Iran can cause major problems for bunker suppliers 37

TECHNOLOGY UPDATECommunication between ship and shore is changing. Esa Henttinen looks at how new technology can benefit the industry 40

FUEL SUPPLYAs SOx deadlines approach, Michael Green of Intertek confronts the question of compliant fuel availability 42

LNG ISSUESBunkerspot takes a closer look at Seagas, AGA’s new LNG fuelling vessel operating in Stockholm 44

PIRACY TRENDSPhilip de Burgh of Gray Page discusses the problem of bunker fuel and oil cargo theft in SE Asian waters 46

EVENT FOCUSThe annual Maritime Week Americas provided a valuable forum for the bunker industry to debate key challenges and opportunities 48

RECRUITMENT ISSUESRory McGuire of Flagship Management looks at the growing need for health, safety, security and environmental professionals in shipping 50

NETWORKINGOn the move... 52

EVENTSEvents and training diary 54

Contents

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NEWS Bunker Overview 4Europe 8Americas 14Asia Pacific 18Africa and Mideast 20

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 © 2013. 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

June/July 2013 bunkerspotwww.bunkerspot.com4

Bunker Overview

A global environment of heightened scrutiny

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The oil industry, in Europe at least, has found itself front-page news again. This time over allegations of price-fixing.

At the time of writing, the European Union’s (EU) investigation into suspected price manipulation by Shell, BP, Statoil and reporting agency Platts was ongoing.

The EU’s director general of competition, Alexander Italianer, said in May that the goal of the enquiry was ‘to make sure that these companies have not colluded to manipulate the prices for oil and biofuel products or prevented other companies from participating in the price-assessment process,’ according to Bloomberg.

In an environment of heightened scrutiny and an increased willingness to probe corporate and institutional activity, investigations into price-fixing or manipulation, and anti-competitive behaviour could be seen as natural by-products of a bleak economic outlook.

In the liquefied natural gas (LNG) sector,

12 month rolling price charts

a new non-governmental organisation (NGO) has been set up to ‘enhance safety and best practices in the use of LNG as a ship fuel’. The Society for Gas as a Marine Fuel (SGMF) was set up following a decision by the Board of Directors of the Society of International Gas Tanker and Terminal Operators (SIGTTO) at its spring meeting in Houston.

‘The use of LNG as a marine fuel presents a major challenge for the shipping industry over the coming years,’ said Luc Gillet, president of SIGTTO.

The creation of the SGMF is a key milestone in the unremitting rise of LNG as a marine fuel. It indicates there is a certain critical mass of member interests worthy of representation, and shows that the industry has now amassed a sufficient degree of clout that other industries and governments should pay it some attention.

Many of the items in the news pages of Bunkerspot reflect the maritime industry’s growing appetite for LNG, and in this issue we

also take a look at AGA’s new LNG bunkering vessel, Seagas, which entered into service in Stockholm earlier this year.

Seagas is the first LNG bunkering vessel of its kind, and on a daily basis it supplies LNG to the Viking Grace, the new addition to the Viking Line cruise ship fleet which operates on the Sweden-Finland route.

The issue of risk management is also a recurring theme. We invited Felix Yamasato of Peninsula Petroleum to share his views on sound credit management, which he believes needs a ‘back to basics’ approach. ‘Whatever the market conditions, the best players will survive and marginal players will disappear,’ he says, taking a Darwinian view of the market. On a similar subject, John Phillips of Awyr Las urges a review and refresh of terms and conditions to adapt to the ebb and flow of market risk.

The environment and environmental reporting also provides a source of much discussion in this issue: David Bolduc of

Marine Diesel Oil

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Bunker Overview

GLANDER

Green Marine gives an overview of the Green Marine environmental programme, while Carbon Positive’s Helena Athoussaki writes on effective measuring of ship emissions. Serge Dal Farra of TOTAL Lubmarine looks at new developments in the bio-lubricant market, while, as the next sulphur emission deadline looms on the horizon, Michael Green of Intertek also considers the question of compliant fuel availability within Emission Control Areas (ECA).

Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) met in Vienna at the end of May. It noted the relative steadiness of prices during 2013 so far, and attributed this to the market being adequately supplied, with periodic price fluctuations a product of geopolitical tensions. And for this issue of Bunkerspot, Chris Thorpe of CTA Financial takes a broader look at other factors that trigger dramatic oil price swings.

Many market players remain preoccupied by the ramifications of the North American shale oil boom – and this issue of Bunkerspot also reflects this attention. Rob Atkinson of KPI Bridge Oil assesses the effect of changing US oil import/export trends, noting that the United States is firmly on course to achieving energy independence by 2030. Adrian Tolson of OW Bunkering looks at offshore bunkering in the Gulf of Mexico, where, he says: ‘the lower cost of tankers suitable and available to be used in offshore bunker supply has both raised the quality and lowered the costs of operating offshore.’ Steve Simms of Simms Showers LLP also does an excellent job of explaining the consequences of failing to comply with US oil trade sanctions against Iran.

Maritime Week Americas 2013, held in Miami in early May, provided a valuable platform for the bunker industry to discuss and reassess its place within an economically and geopolitically turbulent world. In his keynote speech at the event, Paul Stebbins of World Fuel Services Corp., did not sugarcoat his message: he spoke of the global ‘accelerated trajectory of credit and debt’, with a ‘cycle of political dysfunction’ that must be broken. As many of our contributors note in this issue, bunker suppliers are increasingly taking on the role of banks in supporting the maritime sector, and the wider supply chain – will this shift in position create more front-page news for the industry?

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 cst March April May25-29 01-05 08-12 15-19 22-26 29-03 6-10 13-17

Rotterdam d 608 612 596 579 578 590 597 589Gibraltar d 631 628 615 600 605 614 616 608Piraeus d 631 630 613 602 603 610 611 601

Suez d 696 691 698 696 689 689 691 682Fujairah d 637 638 631 613 612 624 630 606Durban w n/a n/a n/a n/a n/a n/a n/a n/a

Tokyo d 679 679 667 670 663 661 664 660Busan d 658 657 653 645 644 651 650 641Hong Kong d 643 648 634 614 615 621 628 618Singapore d 633 633 625 608 606 612 621 608

Los Angeles w 637 628 629 591 640 626 601 639Houston w 615 620 606 584 579 588 604 588New York w 623 631 615 596 587 594 605 589

Panama w 639 639 622 602 600 602 625 614Santos d 620 618 602 588 599 611 620 624Buenos Aires d 619 619 620 628 642 637 638 637

180 IFO March April May25-29 01-05 08-12 15-19 22-26 29-03 6-10 13-17


Suez d 713 710 720 715 712 711 714 708Fujairah d 687 672 675 662 659 690 700 682Durban w 667 672 661 657 657 676 681 672




MDO March April May25-29 01-05 08-12 15-19 22-26 29-03 6-10 13-17


Suez d 1082 1071 1093 1090 1084 1085 1090 1096Fujairah d 1018 997 1008 1006 1013 1012 1014 1007Durban w 1079 1091 1096 1081 1088 1088 1092 1094




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

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Commodity hedge funds have not been spared. The Financial Times reports that they surrendered more than 20% of their assets in 2012. Moreover, larger commodity funds, such as London-based Blue Gold and Houston-based Centaurus, closed in 2012 citing lack of opportunity in energy markets. Since investor demand for commodities has become a major influence on prices, their future absence will surely be noticed.

When gold recently fell $250 per ounce in a matter of days, the mega fund Paulson and Company would have recorded a loss of $9 billion. Although Mr Paulson remains committed to his belief that the US dollar will ultimately depreciate, thereby supporting real assets, other fund investors are not so sure. Heavyweights, including George Soros, regularly trade in and out of massive positions in gold and other commodities. If large players like this are empowered to make quick trading decisions it can put undue stress on markets. As with gold, it will not be that unusual for oil to fall 10% within 2-3 days. This time it may be independent of a broader market sell-off.

Currently, oil supplies and inventories show no signs of shortage. Most recent US Energy Information Administration (EIA) reports indicate that US crude oil inventories have reached record levels, approaching 1.1 billion barrels. With increasing storage and pipeline capacity the risk of a supply shock becomes even more remote. Rumblings from the North American oil patch suggest increasing supply could even overwhelm current infrastructure. If that is true, inventory filling new tank farms in Cushing, Oklahoma may induce a dramatic price shift downwards.

Other grades of crude oil, including Brent – now the global benchmark – will have to follow suit despite a highly volatile spread differential to US benchmark West Texas Intermediate (WTI). This is only in the near term. Longer term, supply alternatives such as natural gas and other petroleum liquids will become more significant.

In 1956, M.K. Hubbert’s Peak Oil theory warned that declining oil production could ultimately limit global economic growth. Though a sound concept, the original theory must now be revised to include the non-conventional supply of oil, including horizontal drilling, ‘fracking’ and the increasing capture of liquefied petroleum gases (LPG), such as propane. Thanks to improving technology and lower cost production, oil and gas producers can afford to pump more barrels at lower prices.

And on the demand side, growth has

As Apple shares rose above $700 in September 2012 any person taking a negative view on the

company’s value would have been labelled a heretic. Having outgrown even Exxon by market capitalisation, Apple’s position as the global information and personal technology provider of the future seemed assured. Several months later it is a different story. Apple’s market value shed approximately $250 billion in a swift move downward following weaker than expected growth rates and earnings. We should not be surprised. Since markets move on expectations and beliefs there is no way to realistically know where prices will be in the future. Is the market for oil any different?

Following the financial crisis in 2008, broad market contagion risk became the key issue for traders and risk managers. With rising correlation between assets, including oil and other commodities, it became difficult to diversify a portfolio of risky assets. Freight rates, oil prices, stocks, bonds – almost everything had sharp price drops through late 2008 and 2009. Since then asset correlation has slowly fallen and oil price volatility has resumed an independent path. As with gold, oil prices react to a set of factors that can quickly change in either direction. However, oil arguably has a more fundamental underpinning. Like human life to water, the global economy depends on energy to thrive.

This is where the agreement for a sharp drop in oil prices comes in. Just as Apple stock had outpaced the growth of the Standard & Poor’s 500, it reversed its course with equal disdain for the broad market. The same could be true for oil prices as the case for continued bull market conditions weakens. The most likely case for a sell-off would be the reversal of commodity funds. Underpinning this view is a fundamental picture that cannot be ignored.

There is no denying that investment funds influence commodity prices in a meaningful way. We now observe oil prices rising when new speculative long futures positions are reported by the commodity exchanges. Although we know the investment funds tend to favour owning commodities, there is no telling when they may change directionally. Some funds are short-term traders whilst others are longer term commodity investors.

An additional challenge is guessing when fund investors will shift money in or out based on sentiment. Financial markets are already showing that some commodities such as metals are falling out of favour.

Commercial Issues

Chris Thorpe assesses the factors that can trigger

dramatic oil price swings

Chris Thorpe is the founder of CTA Financial LLC, a newly established commodity trading advisor. Based in New York, the firm provides advisory and execution services for commodity hedging clients.

Contact:Chris ThorpeCTA Financial LLCEmail: [email protected]: www.ctafin.com

Under pressure


a long run average. Therefore, in cases where fuel prices are well above average, consumers should use cap (call option) strategies. On the other hand, when prices are below average, they should feel more confident securing fixed deals. Since current oil prices are well above the 10-year average, consumers ought to pause and review all their hedging alternatives before agreeing a fixed price.

New supply or disappointing demand may temper oil prices sooner rather than later. And if not driven by fundamental forces, changing sentiment may do the job. Oil could see a price drop if large funds or shift strategies. Since large funds have leadership with changing taste, only insiders may be privy to the exact timing of the next move. If a once certain winner like Apple could drop more than 30% and erase market value equivalent to the gross domestic product (GDP) of Chile, a commodity like oil could fall with much more significant impact.

gasoline demand could be a leading indicator for the direction of oil prices.

Low or negative growth rates in Europe and North America make developing countries’ demand the critical swing factor. China and smaller emerging markets now account for the most new petrol demand. However, data from these countries is difficult to analyse. Either way, any negative economic news from those countries may further depress oil prices based on expectations alone. Even with positive economic news, can oil prices around $100 per barrel persist indefinitely? Not likely.

Price predictions are by nature likely to be wrong. However, it is comforting to know that the market finds some balance over time, save for occasional periods of volatility. In oil markets there is a strong case for mean reversion or regular market corrections. Mean reversion theory claims that prices will trade in wide ranges but will eventually return to

cooled to levels that allow even more time for supply alternatives to take hold in the market. For example, liquefied natural gas (LNG) projects can take several years to complete. LNG ships, floating storage, and import and export facilities are capital intensive, long-term commitments. Yet these projects are now underway and will be completed regularly in the coming years. What was a potential cost competitive supply is now a reality, thanks to technology and persistently elevated crude oil prices.

The demand story is a two-sided wildcard. Gasoline demand growth rates in developed countries have dropped precipitously since 2008 and the United States alone is consuming 3% less gasoline now than five years ago. More dramatically, Spain's year-on-year gasoline demand has fallen more than 15%, according to oil research firm Petromatrix. Albeit diesel is arguably the fuel of the global economic engine, flagging

Commercial Issues

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‘There has been some manoeuvring amongst the players operating in and around the US Gulf Coast’

(OPEC) to the United States totalled 3.6 million b/d in March.

There is a massive push to drive crude oil down to the US Gulf – some 40% of refining capacity is located here and the majority of refineries are now running domestic crude.

For the bunker supplier, however, the shale oil revolution could be a two-edged sword. Falling imports mean fewer very large crude carriers (VLCCs) and tankers coming into the US Gulf, while the US government’s continuing reluctance to relax its stance on oil export licences will inevitably lead to a shipment ‘bottleneck’ in the context of rapidly escalating domestic oil production.

There has been some manoeuvring amongst the players operating in and around the US Gulf Coast supply and trading sectors. Looking at the oil majors, ExxonMobil has withdrawn from Panama, and Shell Marine Fuels does not seem overly keen on US Gulf Coast inquiries. Chevron has contracted its supply focus to concentrate on New Orleans, Louisiana (NOLA), while BP Marine Fuels seems to be focusing on the operations of the International Terminals Co. (ITC).

Other players, however, seem more enthusiastic about US Gulf business opportunities. At least six trading/physical supply companies have established US offices in the past 18 months, with Houston as a favoured location.

Five companies have set up bunkering operations, or attempted to set up operations, in the offshore supply sector in the US Gulf over the past year. At the time of publication, three remain.

The Panama Canal expansion project should also offer significant business potential for the hungry and proactive bunker supplier. New players are already lining up and staking their positions in the Panama market that holds the prospect of 6 million tonnes of bunkers running through the Canal after 2015.

While changing North American oil

The US shale oil boom has irrevocably changed the landscape of the North American

energy market. New cross-border trade patterns, regulatory, technical and economic challenges in the oil sector – and the very real prospect of energy self-sufficiency in the coming decades – make the US market an interesting, if a little daunting, place for a bunker supplier to be.

Shale oil reserves in the North American market (estimated to be around 300 million metric tonnes (mt)) are some four times larger than proven Saudi Arabian reserves. The International Energy Agency (IEA) is predicting US energy independence by 2020 and a potential North American oil surplus by 2030. With shale oil currently trading at a significant discount to US benchmark West Texas Intermediate (WTI), it is also a highly attractive commodity from a commercial standpoint.

Forecasts for US oil import and export flows are being radically revised but as a possible tipping point for surplus oil production looms on the horizon, the US administration is coming under increasing pressure – notably from the IEA in mid-May – to make a decision on the relaxation of oil export controls.

The Export Administration Act of 1979 banned the export of US crude, except to Canada and Mexico. In February this year, US crude exports reached a 13-year high as shipments of surplus shale crude to Canadian refineries gathered pace.

Export destinationHowever, Canada has a similarly huge

reliance on the United States as an export destination. According to the US Energy Information Administration (EIA), it sent some 2.5 million barrels per day (b/d) of crude into the US market in March.

Looking ahead, the controversial proposed Keystone XL pipeline would also feed more of Canada’s crude oil to refineries on the southern US coast.

As US domestic oil production climbs, there is an inevitable knock-on effect on imports. While Canada may be the major beneficiary of US crude exports, the combined exports of the Organization of the Petroleum Exporting Countries

Commercial Issues

Bunker suppliers must be proactive in responding to

a rapidly evolving US energy market, says

Rob Atkinson of KPI Bridge Oil

Carpe diem

Rob Holt Atkinson is Vice CEO, KPI Bridge Oil Group

Contact:Tel: +1 732 219 7900 Email: [email protected]: www.kpibridgeoil.com

‘For the bunker supplier, the shale oil revolution could be a two-edged

sword’


import/export flows will continue to impact the bunker market, suppliers are also having to confront other challenges – not least the effects of sulphur emission reduction as mandated by the North American Emission Control Area (ECA).

One technical solution to the new regulations is the use of scrubbers. However, this technology is expensive for both retrofits and newbuilds (a two year return on investment (ROI) would be realistic), while effluent issues also remain a significant hurdle to be overcome.

A large scale switch to liquefied natural gas (LNG) – the apparent new buzzword in the marine fuels sector – would also seem to be impracticable, at least for the foreseeable future. For a shipowner or operator, opting for LNG-fuelled vessels is also an expensive route to ECA compliance. Such a decision would carry a 2-4 year ROI. Significant onboard storage requirements and an

The depressed global economy continues to generate black clouds for the beleaguered maritime sector. Credit lines remain an on-going problem for the bunker industry, as depressed freight rates continue to plague shipping companies and erode any vestige of liquidity. Many shipping lines are now battling with years, not just months, of losses.

On a macro-economic level, world powers continue to debate the thorny issue of reining in spending and getting national budgets under control – and progress on this is woefully slow.

However, while the North American oil sector is experiencing a time of evolution and, perhaps, revolution, there are opportunities to be seized by those bunker suppliers willing to spend time gaining the measure of the new business environment – and then being ready to act quickly.

There really is no such thing as luck – luck is simply where prior preparation meets opportunity! Carpe diem!

embryonic supply infrastructure also make a move to LNG fuel unlikely in the short term. Even taking a longer view, it may well be that only vessel sectors such as ferry lines and domestic liner services have any appetite for LNG as a marine fuel.

New lube oil requirements and product developments due to the ECA also have to be factored in to the ship operator/owner’s checklist, raising issues over storage and feed rates, etc. This is yet a further complication for the industry.

Commercial Issues

‘The US administration is coming under increasing

pressure to make a decision on the relaxation

of oil export controls’

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What is MRV?In general, the scope of an MRV system is to establish a reliable and verifiable regular monitoring procedure for shipping emissions. The results give an accurate picture of the vessels’ emissions, helping to inform decisions over emission management and to plan for emission reduction. Both economic and environmental benefits can be identified through MRV.

An MRV system is a three-step approach towards energy efficiency indication. It consists of the following phases:

Monitoring: observing all information related to GHG emissions

Reporting: a template for relaying this information in a widely presentable form

Verif ication: the independent verif ication of the monitored and reported information allowing the verif ier to aff irm that the procedure meets the regulatory and technical requirements.

The MRV system should follow the principles of completeness, consistency, cost-effectiveness, transparency and faithfulness.

CO2 emissions for the MRV system could be determined by using two methods: fuel statistics (top-down approach) and activity data (bottom-up approach).

Top-down emission estimates are based on fuel sales data and there are certainly limitations due to different reporting procedures and accuracy in various parts of the world. There are also difficulties in

The European Commission will propose legislation for monitoring reporting and

verification (MRV) of carbon dioxide (CO2) emissions from maritime transport in 2013, as announced by Commissioner Connie Hedegaard and Vice President Siim Kallas in October 2012.

Early this year, the International Maritime Organization’s (IMO) Expert Workshop took place, focusing on the second greenhouse gases (GHG) emissions study for international shipping. The team made recommendations to the Marine Environment Protection Committee (MEPC) regarding improvements in the IMO’s future work in addressing GHG emissions from international shipping.

The IMO has introduced two measures for energy efficiency, the Energy Efficiency Design Index (EEDI) and the Ship Energy Efficiency Management Plan (SEEMP). EEDI refers to new vessels and requires greater standards for design efficiency. SEEMP is mandatory for existing and new vessels which must follow a mechanism that uses new technologies and practices to improve operational efficiencies.

However, in the absence of regulatory requirements for monitoring, reporting and verifiable target-setting, SEEMP’s effectiveness is questionable. With no administrative 'teeth' it is very likely that SEEMP will remain on the shelf.

Fuel monitoring is, of course, a common practice in the shipping industry but the lack of guidelines or legal requirements that clearly define a method for monitoring makes comparison between the existing data impossible.

The upcoming monitoring reporting and verification (MRV) regulation will be a step towards a robust and consistent system of monitoring vessels’ emissions and, perhaps, a blueprint for a measure of European Union (EU) or global level market-based measures (MBM).

‘MRV results give an accurate picture of the

vessels’ emissions, helping to inform

decisions over emission management and to plan for emission reduction’

Emissions Monitoring

Helena Athoussaki, CEO of Carbon Positive, looks at how measuring

ship emissions can be standardised and simplified through a

process of monitoring, reporting and verification

Helena Athoussaki is founder and CEO of Carbon Positive

www.carbonpositive.net

Reliable reporting

Monitoring reporting and verification (MRV): essential preparation for a global measure


reporting indicates a commitment to transparency and evidence for charterers and other stakeholders (investors, ports etc.) who require vessels to be operated more efficiently. Reporting also helps promote companies’ efforts towards striving for a better environment and green supply chain.

Monitoring and reporting must follow a standardised procedure using an electronic format and could be delegated to an independent competent third party (authorised by the shipowner).

For verification, an MRV system needs an accredited, independent third party to validate emissions according to monitoring and reporting procedures. The process, scope, criteria and level of assurance are agreed with the verifier. The level of assurance is used to determine the depth of detail that a validator or verifier designs into its plan to determine if there are any material errors, omissions or misrepresentations. The verifier could check the emissions report, look at all BDNs covering the compliance period of that ship, and the calibration certificates of the instruments used according to the monitoring plan.

MRV and carbon emissions managementThe recent announcements and proposals from the IMO and EU will confirm the MRV system as the cornerstone of vessels’ energy and carbon emission management.

As an independent service provider,

differentiating international from domestic usage of fuel.

Bottom-up estimates are far more detailed and are generally based on ship activity levels. They calculate the fuel consumption and emissions from individual ship movements. Quantitative measures for a ship’s activities could include: an inventory control (oil record books and bunker delivery notes (BDNs)); direct measurement (sensors); or fuel consumption monitored for individual ship categories using the conversion factors established at the IMO for marine diesel, light and heavy fuel oils, liquefied petroleum and natural gas.

Whichever method is used should be fully documented in the monitoring plan – a detailed, complete and transparent document containing the description of the vessel, information on monitoring, monitoring responsibility and reporting, a list of emissions sources per activity, and a description of the calculation/measurement methodology used.

The monitoring plan is followed by an emissions report. Reporting is essential for internal use as it allows the company to create baselines and benchmark its vessels against the rest of its fleet or the competition. In addition, it can act as a good abatement strategy to maintain profitability. Externally,

Carbon Positive developed the first carbon emissions management programme specifically designed for the maritime industry and the first carbon emissions certification scheme as a proof of measurement/monitoring and reduction.

The Carbon Positive Programme for Ships (CPPS) takes a holistic approach to energy and CO2 management and spans three phases:

● Measurement ● Reduction ● Offset.

The entire programme is based on a robust and transparent MRV system. Monitoring and reporting are accredited by a European flag and verification is issued by the International Association of Classification Societies.

CPPS, an annual subscription-based programme, is applicable to all vessels and built on international best practices. It follows certain principles, has standardised methodology and covers both commercial and regulatory requirements.

CPPS measures fuel consumption based on activity data, operates with all data sources (manual, electronic), uses automated procedures and monitors all energy efficiency data.

For shipowners, the programme is essential for assisting with energy efficiency and CO2 reduction, defining specific measurable goals, performing analysis of the monitoring data, reviewing energy abatement measures, looking at the economic impact of various carbon cost scenarios, and helping to communicate achievements to stakeholders.

The Carbon Positive Certification Scheme signifies that a vessel is committed to a carbon management plan following a standardised methodology and demonstrates transparency by reporting energy efficiency.

CPPS is a cost-effective solution to energy and CO2 management for reducing costs, preparing for regulation and improving market position.

‘The recent announcements and

proposals from the IMO and EU will constitute the MRV system as the cornerstone of vessels’

energy and carbon emission management’

Emissions Monitoring

Carbon Positive Programme for Ships (CPPS)


address relevant environmental issues and offer concrete actions to be undertaken by the participating companies.

Green Marine’s environmental programme received the Green Shipping Initiative of the Year Award at the Sustainable Shipping Awards 2011. This international accolade recognises environmental ex-cellence and the crucial work of initiatives such as Green Marine that help the marine industry improve its sustainable development practices.

Green Marine was launched in 2007 as a bi-national programme for the maritime industry in Canada and the United States. The programme originally concentrated on building a base within the Great Lakes – St Lawrence River maritime community. Since then, Green Marine’s membership has more than doubled and now includes participants on both coasts of Canada and the United States. In fact, West Coast members now represent approximately 20% of Green Marine’s total membership and include major participants such as Port Metro Vancouver (the largest port in Canada) and the Port of Seattle (the 8th largest US port).

This steady expansion in membership bears testimony to the maritime industry’s increasing awareness of Green Marine’s credibility and its success in meeting the needs of many companies within the maritime world.

Green Marine’s programme offers a detailed framework for maritime companies to first establish and then reduce their

Raising the barThe Green Marine Environmental

Program is a voluntary initiative that encourages marine tran-

sportation enterprises to work together on reducing their environmental footprint. The programme currently addresses nine environmental issues related to air quality, water quality, aquatic invasive species, community impact, and garbage management.

Companies participating in Green Marine are dedicated to sustainable marine operations. They agree to demonstrate corporate leadership in the search for best environmental practices in accordance with a sustainable development approach, to carry out the programme’s activities in a responsible manner with a view to minimising environmental impacts, to integrate sustainable development practices that are technically and economically achievable, and to collaborate with governments and citizen groups in the progressive implementation of the action plans arising from the Green Marine programme.

The initiative provides a roadmap for shipowners, ports, terminals and shipyards to take concrete measures that exceed regulatory requirements and achieve ever-increasing levels of environmental excellence.

The uniqueness of Green Marine lies in its membership composition: it brings industry stakeholders, legislators and environmental groups together at the same table. Together, they shape the programme’s performance indicators, making sure they

David Bolduc of Green Marine outlines

the programme’s strategies for increasing

environmental awareness within the maritime sector

Environmental Issues

Contact:David BolducExecutive DirectorGreen MarineEmail: [email protected]: www.green-marine.org

‘The programme offers a detailed framework for maritime companies

to first establish and then reduce their environmental footprint’


apply voluntary preventive measures to reduce the risk of propagating aquatic invasive species; the majority of participants monitor their greenhouse gas (GHG) emissions (despite this not being a regulatory requirement); and close to 25% of shipowners have achieved an annual decrease in the intensity of their GHG emissions.

Green Marine will continue to enhance the environmental programme by adapting existing performance indicators and developing new ones to encompass the organisation’s expanded membership. Green Marine is committed to keeping its place of excellence among environmental initiatives

within North America’s maritime industry. Diluting the programme’s standards or requirements is out of the question. In fact, welcoming new members from different sectors is resulting in additional input on environmental and technical committees to extend the programme’s reach even further.

Green Marine’s fundamental commitment to continuous, measurable improvement in environmental performance demands that the programme itself undergoes regular scrutiny. The programme’s continued success and expansion depends on it being responsive to the needs of different sectors in different regions and on serving a varied but motivationally connected membership.

It is clear that the marine industry’s desire to reduce its environmental footprint is genuine and strengthening. It is up to Green Marine to raise the bar higher, always keeping the programme’s core values of rigour, results and transparency in mind.

‘Reports are independently verified every two years to ensure the programme’s

rigour and integrity’

environmental footprint. Each participant completes Green Marine’s detailed annual self-assessment report. The results determine the participant’s ranking for each performance indicator on a 1-to-5 scale. Level 1 constitutes mandatory compliance with existing regulations, while Level 4 reflects investments in environmental technologies. Level 5 indicates leadership and excellence.

Reports are independently verified every two years to ensure the programme’s rigour and integrity. Participants are required to demonstrate year-on-year improvement in measurable ways to maintain their Green Marine certification. The process is also transparent as each company’s individual results are published in Green Marine’s annual report and posted on its website.

Green Marine participants are achieving concrete and measurable results: all Green Marine shipowners carrying ballast water

Environmental Issues

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operation and Development (OECD) 301 B requirements and produced excellent results. They also fulfil the European Ecolabel criteria for biodegradability, renewable carbon content and eco-toxicity.

Alongside innovative lubricant solutions, legislation is the most powerful tool in the fight for sustainable shipping. Historically, legislation governing the lubricants used onboard vessels has simply not existed. However, in spring 2013 the EPA issued the 2013 Vessel General Permit (VGP) with regulations that will enter into force in December.

The VGP states that: ‘All vessels constructed on or after December 19, 2013 must use an environmentally acceptable lubricant in all oil-to-sea interfaces. For all vessels built before December 19, 2013, unless technically infeasible, owners/operators must use an environmentally acceptable lubricant in all oil-to-sea interfaces. “Environmentally acceptable lubricants” means lubricants that are “biodegradable” and “non-toxic” and are not “bio-accumulative”...’ Shipowners worldwide will now have to use lubricants that are compliant with this new legislation if they want to transit through US waters.

The final VGP also contains more stringent effluent limits for oil-to-sea interfaces and exhaust gas scrubber wash water, which will assist in the environmental protection of US waters. The EPA has also improved the efficiency of several of the VGP’s administrative requirements, including allowing electronic recordkeeping, requiring an annual report in lieu of the one-time report and annual noncompliance report, allowing combined annual reports for some vessel operators, and a reduced inspection frequency for vessels in a prolonged idle status, and requiring small vessel owners and/or operators to obtain coverage under the VGP by completing and agreeing to the terms of a Permit Authorisation and Record of Inspection form.

This is a period of change for shipping and as the industry becomes more energy-efficient and sustainable, lubricant providers must remain one step ahead to ensure that the global fleet is protected and fully equipped to take up evolving eco-efficiency technology solutions of the future.

TOTAL Lubmarine will continue to work closely with both original equipment manufacturers (OEMs) and customers to demonstrate that innovative technology and specifically lubricants combined can safeguard efficient operations for the future, that improve performance while reducing environmental impact.

Protecting the global maritime environment is increasingly a priority for shipowners and

operators, especially as environmental legislation tightens.

International organisations such as the International Maritime Organization (IMO) and the US Environmental Protection Agency (EPA) are mandating that the shipping industry plays a proactive role in limiting its environmental impact.

It is essential that marine lubricant suppliers fully commit to supporting shipowners and operators to effectively manage these challenges and champion sustainable, eco-efficient operations. Greater responsibility for the environment drives innovation, and there is a growing demand for new solutions that enable the shipping industry to maintain and improve delivery of its daily operations.

Port and harbour areas in particular are subject to the industry’s most stringent regulations, and here environmental protection is considered an absolute priority.

A key challenge for all vessel operators is stern tubes lubricant leakage, which can remain undetected until a vessel’s next dry dock. In some cases, this may last up to four or five years. With a global fleet of more than 100,000 vessels, the cumulative effect of oil leaks, no matter how miniscule, must be regarded as a critical factor in environmental protection. According to the EPA, one litre of mineral lubricant pollutes 1,000,000 litres of seawater.

To aid in the fight against this, TOTAL Lubmarine has developed a range of bio-lubricants, covering bearings, gears, hydraulic systems, wire ropes and stern tubes. Bioneptan, its stern tube bio-lubricant, for example, has minimal impact on the marine environment should it come in contact with the ocean. Bioneptan is a synthetic ester biodegradable lubricant and is manufactured with synthetic base oils making it non-toxic and biodegradable to nearly 80% of its ultimate state of carbon and water within 28 days. Not only that, Bioneptan is also more durable than mineral lubricants, which are high in toxicity for the marine environment.

Given the indisputable impact of lubricants on the marine environment and the fact that all machinery uses lubricants, the risk of spills and leaks is impossible to eliminate. TOTAL Lubmarine’s bio lubricants address the need for more sustainable lubricants, especially for stern tubes and propeller shafts – areas where leaks are most common. The Bioneptan products have been through rigorous independent testing under the Organization for Economic Co-

Serge Dal Farra of TOTAL Lubmarine looks

at how new developments in the bio-lubricant market are helping

shipowners to maintain their environmental

commitments

Environmental Regulation

Serge Dal Farra is marketing manager at TOTAL Lubmarine

Contact: Tel: + 33 1 41 35 95 55 Email: [email protected] Web: www.lubmarine.com

Eco-commitment


options, to ensure ease of applying for a vessel arrest in a case of non-payment? If English law cannot do this, in a modern world full of sub-charters, pool operators, charter/operators and managing agents, then perhaps another can? Perhaps US law? A few dollars invested in considering this would constitute money well spent.

Trading partnersNext, there is the question of how we choose our trading partners, and moreover, who should choose them.

In recent months, we have noted at least one prominent bunker supply and trading firm building its business development team, reaching out to professionals with market and counterpart knowledge but remote from the commercial taint of trading or marketing, often sourced from the credit report-writing businesses of Lloyd’s List Intelligence (in the main) and Infospectrum (to a lesser extent), and even from our own Ocean Intelligence.

This must be viewed with real interest. It both endorses the opinion that these analysts have a great wealth of knowledge and ability in business development and counter-party credit management, and reinforces the view that the credit function must remain separate from both finance and marketing/sales, as it must maintain an objective viewpoint.

By cutting their teeth in these environments, these people have gained similar experience and thought processes, and have emerged as a strong cadre. Almost all have continued to support and utilise the credit reporting agencies themselves, suggesting that their confidence in the product is not heavily diminished by staff change, and is possibly a sign that the process for selecting and developing the credit report writers is sound.

So perhaps the time is right to invest some money in reviewing T&Cs and, in particular, reconsidering a choice of law. The sector clearly benefits from the agencies’ credit report writing analysts when they are engaged directly by the market (bunker traders and suppliers, etc.), and also when they remain with the credit reporting businesses of Ocean Intelligence, Infospectrum, Lloyd’s List Intelligence and Dynamar. Long may it be so.

Credit Issues

In recent talks with a bunker trading company credit manager, he disclosed the inordinate amount

of money that the business had spent reviewing a credit insurance proposal, yet he acknowledged that it had not reviewed its own general terms and conditions (T&Cs) for some time.

The manager was concerned whether the policy was worth having and how to change the terms to make it more secure. We said that the policy was indeed worth having, but that the manager would have benefitted by talking to us about it at an earlier stage. The money spent on legal fees could perhaps have been better spent elsewhere. So this raised the question: where should we be investing our money in order to minimise the risk?

In this article we will consider two key areas: one legal, the other operational. These two areas have been selected because they have particularly caught our attention recently, and they came strongly into focus during recent customer visits.

Legal standpointIt always seems amazing that the bunker sector continually insists on selecting English law in its general T&Cs. The quality, understanding and availability of legal services in the United Kingdom is, of course, excellent, and the law is well established and respected, but it cannot always be applied to the maritime sector.

The United Kingdom used to have a sizeable merchant fleet whose reach criss-crossed a globe tinged with the reddish-pink of colonies, and later the multi-colours of the Commonwealth. This structure had been little changed since the time of Lord Nelson and as such, English law, when applied to maritime matters, had developed a significant bias towards shipowners and less towards cargo owners or non-shipowning interests.

The English law we cherish and seek to apply in bunker supply contracts today (especially in respect of the ‘Maritime Lien’, the once exotically entitled ‘Mareva Injunction’ and now the ‘Freezing Injunction’) has a strong leaning towards the shipowners’ interests and not those of the supplier or charterer, making vessel arrest a tiresome and tedious affair.

It is not the role or responsibility of Ocean Intelligence Pte Ltd (or for that matter Awyr Las Pte Ltd) to say what law should or can be applied by individual companies. That is for each company’s specific legal counsel. The point is: should general T&Cs not be reviewed more regularly, especially in the context of the choice of law

Risky business‘Where should we be

investing our money in order to minimise the

risk?’

John Phillips of Awyr Las stresses the importance of undertaking a regular

review of T&Cs

John Phillips is a Fellow of the Institute of Chartered Shipbrokers, a Chartered Member of the Institute of Logistics & Transport, and holds an MSc in Port Management. He became Managing Director of Ocean Intelligence Pte Ltd in 2011. He also runs his own marine and credit management consultancy business, Awyr Las Pte Ltd.

Web: www.oceanintelligence.com / www.awyrlas.com


‘Working capital surpluses are really net cash outflows unless they are entirely covered by cash in the bank’

include credit available to purchase fuel, but rather credit facilities that allow you to access cash to pay suppliers, such as revolving bank credit lines.

Another layer of liquidity is net cashflow or, at the personal level, what is left from your pay cheque after you pay all your bills and taxes.

Most companies in the shipping industry do not produce financial statements and, if they do, you will have a cash balance from a particular date. This figure is your cash base (CB).

Since cashflow statements are rarely available, even when the other two financial statements are provided, let’s learn how to build an operating cashflow statement when all we have is profit and loss statements and balance sheets.

Remember that these statements are based on traditional accounting methods and do not necessarily reflect cash inflows and outflows.

Start with net income – or net losses – and begin to add non-cash items, such as depreciation and amortisation, deferred income taxes and write-offs. Other items to consider are minority interests and undistributed equity earnings.

Also, remember that assets are cash outflows, whereas liabilities are cash inflows. If you are a client of Lloyd’s List Intelligence and have read one of the reports issued by the New York office, you probably knew this already, but let us state this clearly: working capital surpluses are really net cash outflows unless they are entirely covered by cash in the bank.

Hence, you need to account for changes in working capital since booked revenue or sales are not necessarily received in the period – for example, accounts receivable – just like all expenses are only paid when they are due, for example, accounts payable. This becomes your cashflow base (CFB) or funds

A recent move from undertaking risk assessment at Lloyd’s List Intelligence to business

development at Peninsula Petroleum has allowed me to look more closely at how you can keep your bunker business away from trouble given that most of the shipping industry is facing low rates and high bunker prices for such an extended period of time.

The obvious answer is: do not extend credit to customers or seek to do business on credit with new or potential customers with weak liquidity.

When I first arrived at Lloyd’s List Intelligence (then known as MRC), in 1997, I was shocked when a very senior analyst implied financial analysis was not that important in this business. Yet this was the year of the Asian financial crisis and several insolvencies. Back then, there were two credit reporting agencies and MRC was the leading supplier to the bunker industry.

The emphasis was on intelligence gathering, i.e. credit references, and on the general state of the particular sub-sector 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. Sadly, even now, all shipping credit reporting agencies continue to measure liquidity in the same manner.

Bunker players were – and are – partly to blame. Unless you were a major supplier, the position of credit manager did not exist among most bunker traders, even those with global operations. Often the credit decision was made by the trader or senior trader in the organisation.

The mantra for the first crop of credit managers was 'know your customer’. This was just fine until the prolonged downturn hit the shipping markets. One of the biggest problems facing credit managers, as always, was determining with any degree of certainty the financial state of the buyer, with or without financial statements.

Therefore, let’s establish what constitutes liquidity.

At its most basic level, liquidity comprises cash at hand plus any available credit facilities. In other words, what is in your wallet plus anything available on your credit cards.

At company level, the latter does not

Credit Issues

Felix Yamasato of Peninsula Petroleum

provides some essential guidelines for sound credit management

Go with the flow

Felix Yamasato works in business development at Peninsula Petroleum Inc.

Contact: Tel: +1 203 252 4068Web: www.peninsulapetroleum.com

‘Whatever the market conditions, the best

players will survive and marginal players will

disappear’


in each of the sub-markets. You need to develop a way to benchmark, financially and operationally, all your customers and any potential new customers, not only against each other, but also against their 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 – which is just like flying without instrumentation.

Bunker players, and bunker traders in particular, are in effect banks disguised as commodities traders. They do not have to face stringent regulations such as capital requirements, but there is a need for a proficient team of risk appraisers at any bunker organisation, those that emphasise cashflow instead of working capital or net profits. I am sure you remember what happened to US and European banks when they stopped measuring risk appropriately.

Survival of the fittestA lack of financial statements in itself is not a reason to deny credit, even for buyers operating in an industry facing prolonged low profitability or unprofitability. Whatever the market conditions, the best players will survive and marginal players will disappear. Cargoes must always be transported and, despite the global economic turmoil, volumes have continued to increase.

My recommendation is to understand which companies are the strongest players

from operations (FFO).After you determine CFB or FFO, which

is cashflow from operating activities minus the net change in working capital, you need to find the adjusted free cashflow (AFCF), which accounts for other required cash outflows. AFCF basically subtracts capital expenditures and dividends from FFO.

You can find capital expenditures within the cashflow statements under cashflow from investing activities, while dividends are typically found under cashflow from financing activities.

Lastly, you need to assess the impact of the company’s capital structure on net cashflow and related debt servicing requirements, meaning that you need to account for increasing, stagnant, or decreasing capital expenditures. The incremental debt servicing can be calculated by measuring the rate of change in long-term debt between periods and applying the rate change to interest expenses.

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Credit Issues

‘Bunker players, and bunker traders in

particular, are in effect banks disguised as

commodities traders’


large crude carriers (VLCCs) being lightered for crude oil was the catalyst for the offshore bunker market and it is only natural that an offshore supply business has developed to allow these and other shipowners to take advantage of low cost supply. Ideally, any owner calling or working cargo in the US Gulf should look to take advantage of local prices, and the offshore supply market allows them to do this.

OW Bunker operates two supply vessels in the lightering zones of both Louisiana and Texas. We operate two of the most modern and versatile supply tankers in the offshore bunkering business. The Elisalex Schulte (16,000 deadweight tonnes (DWT)) and Wappen Von Hamburg (8,000 DWT) are ideally suited to provide a full range of quality products to all types of vessels. Both vessels are operated by experienced lightering and bunker crews, and are correctly sized for the offshore business. Pumping rates approach 1,000 metric tonnes (mts) per hour.

Working in partnershipTo be a leading fuel supplier in this region, and indeed globally, it is vital to be able to provide customers with more than just products. They need fuel procurement solutions.

This is done by looking beyond just the cost of fuel to create supply solutions that focus on delivering savings through creating efficiencies within every element of the supply process. This takes commitment from bunker suppliers to provide the highest quality service, investing in their own supply infrastructure and working in partnership with customers to ensure that the products, means of supply and management of risk are right for the needs of each customer’s business.

Our aim in creating an offshore supply offering was to ensure that every element within the fuel supply chain has been designed to increase efficiency. This saves our customers time through providing quick

‘The lower cost of tankers suitable and available to

be used in offshore bunker supply has both raised the quality and lowered the costs of operating

offshore’

Offshore bunkering activity in the Gulf of Mexico is not a new phenomenon. Supplying fuel

in this region first started in the 1980s, but it is only in the past six years that a number of factors have come together to create a sustainable and vibrant business.

Foremost among these is the increased level of shipping activity in the offshore lightering zones, stimulating demand for bunkering services for all types of vessels, particularly tankers, bulkers and gas carriers operating in the region. In addition, from the supplier’s perspective, the lower cost of tankers suitable and available to be used in offshore bunker supply has both raised the quality and lowered the costs of operating offshore. The result of all this is that buyers have recognised the potential cost and operational efficiency savings of bunkering offshore.

This is set in the context of a challenging global economy, rising fuel prices, a tightening credit market, higher overall operating expenditure, as well as increased environmental legislation such as the recent North American Emission Control Area (ECA). Any opportunity, therefore, to improve operational efficiencies and reduce costs makes a compelling proposition and a chance that cannot be passed up. The result is that today, a small group of fuel suppliers has moved into what has become an increasingly active and competitive market to meet this demand.

Economies of scaleWhen we consider the challenges of meeting the 1.00% sulphur ECA limit, from a buyer’s point of view, switching to low sulphur fuel oil (LSFO) takes place on the high seas and it is only logical that the offshore market should play a key role in satisfying this supply need. Cost-wise, some of the smaller ports of the US Gulf onshore supply market have limited economies of scale for LSFO supply. Therefore, prices can be high, which can make the offshore market a better option.

The same situation can also exist for high sulphur fuel oil (HSFO) supply, but this is a less consistent source of offshore demand. Having said that, in some ports onshore delivery charges can be quite expensive, which means that taking fuel offshore can often be the cheaper option.

The Houston market and surrounding ports are consistently some of the most economical places to buy fuel in the world. However, some of the vessels that come into the Gulf of Mexico do not call at any US Gulf ports. The bunker demand from very

Adrian Tolson of OW Bunker reviews offshore bunkering activity in the

Gulf of Mexico

Regional Focus

Adrian Tolson is Regional Manager – North America, at OW Bunker, one of the world’s largest independent suppliers and traders of marine fuels and lubricants.

Web: www.owbunker.com

A symbiotic relationship


fuel quality inspection company. This is part of our commitment to drive annual global claims below 1%, an unprecedented figure in the bunker industry.

With a more rigorous monitoring of the quality of the products supplied, we can save our customers from unnecessary and avoidable vessel downtime. We can do this by helping to reduce both wear and tear on engines, as well as detect and protect against high levels of cat fines and other engine operational issues, which, according to a recent DNV Petroleum Services (DNVPS) study, have been on the increase in LSFO fuels. In the Gulf of Mexico, providing such solutions is integral to enabling customers to be fully compliant with the ECA regulations.

A new supply eraIt is through adopting such measures, and putting the operational requirements of customers at the heart of how we do business, that we are entering a new era of bunker supply – a market defined by professionalism, integrity and quality. The bunker industry now plays a critical role in financing the shipping industry, and we therefore have a vested interest in ensuring its profitability and sustainability.

With little credit available, bunker suppliers that have the financial strength, liquidity and infrastructure are increasingly taking the role of banks and financial institutions in granting credit, and keeping the industry afloat. Inevitably, this has its inherent risks, which must be recognised. As it is fundamental that suppliers are financially strong enough to support customers, it

is only right that a fair margin is taken: one that doesn’t exploit the situation, but rather engenders the long-term success and longevity of the industry. We’re all in this together, and as such we must be engaged in a symbiotic, not a parasitic, relationship.

It is true that the bunker industry – like any industry – has room to improve and opportunities for further progression. However, it is up to bunker suppliers themselves to take the lead and to set new benchmarks for quality and best practice, and to assume a position of greater responsibility. The physical supplier’s role is changing, but it is changing for the better. We are an increasingly important link within the shipping supply chain. And it is vital that we take responsibility and seize the opportunity for delivering on the value that we must now provide.

Taking the Gulf of Mexico as an example of best practice, we can see the benefits for all parties of thinking outside the box and working together to make life that little bit easier for our customers.

product supply, and it means that they don’t have to deviate from their course to bunker in port, saving them the calling costs and time of doing so. The savings quickly add up.

Product qualityHowever, while the development of efficiency and cost-effective supply solutions is critical, there remains a real focus on ensuring the quality of products. This has always been a key debating point within the industry, but it has become even more important as environmental regulations and quality standards have become more stringent, and the formulation of products more complex. It has also become critical for bunker suppliers to play a greater role and take more responsibility for assuring the quality of products supplied.

OW Bunker has committed itself to a global quality standard for products supplied by our physical operations. Customers are given a full specification analysis in advance of any physical delivery, prior to the usual testing procedures conducted by an external

Regional Focus

‘Bunker suppliers that have the financial strength, liquidity and infrastructure are increasingly taking the role of banks and financial

institutions in granting credit’

‘The bunker industry now plays a critical role in financing the shipping

industry, and we therefore have a vested interest in ensuring its profitability

and sustainability’

A symbiotic relationship


sanctions. If OFAC sanctions can cut off the marine fuel supply, the trade stops.

On the listMight you as a marine fuel supplier, broker or trader be the target of OFAC sanctions? First, consider the potential impact of sanctions. OFAC’s Overview of OFAC Regulations Involving Sanctions against Iran warns that criminal penalties for violations of the Iranian Transactions Regulations may result in a fine of up to $1,000,000 and a prison sentence of up to 20 years.

If your company is sanctioned, OFAC will add it to its Specially Designated Nationals (SDN) list and once you are on that list, no entity which wants to avoid sanctions will do business with you. It is very difficult to be removed from the list by OFAC. Whether your company is in the United States, sells outside the United States, or is entirely unrelated to the United States, you can be subject to US sanctions if your company is involved with commerce to, from, or with Iran, with substantial civil and

‘Whether your company is in the US, sells outside the US, or entirely unrelated to the US, you can be subject

to US sanctions if your company is involved with

commerce to, from, or with Iran’

Trade Sanctions

US trade sanctions against Iran can cause

major problems for bunker suppliers

Will you or your company be the first marine fuel supplier, broker or trader sanctioned

by the US Treasury Department’s Office of Foreign Assets Control (OFAC) for trading with Iran?

Trends in OFAC sanctions suggest that the OFAC soon may turn its public attention to marine fuel suppliers, brokers and traders, even to those who have no direct US connection. The signs are that OFAC is turning its internal attention to those selling marine fuel which either has some Iran sourcing or which facilitates otherwise unlicensed trade with Iran.

This attention makes sense. The only thing that’s surprising about it is that it’s taken OFAC so long to realise that a restriction on marine fuel sales, and provision to vessels trading with Iran, will even further constrain Iran’s economy.

Exported oil is still Iran’s primary source of income. Most Iranian petroleum exports still require marine tanker transport. These require marine fuel to run. Iranian petroleum is either brought by tanker to a refinery and resold there, or transferred in open water to a non-Iranian tanker, which itself requires marine fuel to run. Enabling this are the vessels which transport spare parts, equipment and the range of supplies essential to the operation of the Iranian petroleum industry.

Every bit of this commerce with Iran, from the purchase of refined Iranian petroleum products, to supporting its transshipment or provisioning by selling marine fuel to power the vessels trading with Iran, can be subject to OFAC-administered

Legal minefield

Steve Simms is Principal of Simms Showers LLP

Contact:Tel: +1 410 783 5795Email: [email protected]: www.simmsshowers.com


carrier transporting passengers or goods to or from Iran are permissible if they are:

(1) Bunkers or bunkering services;(2) Supplied or performed in the course of

emergency repairs; or(3) Supplied or performed under circum-

stances which could not be anticipated prior to the carrier's departure for the United States.

criminal penalties – and even more seriously – substantial damage to your business if you are added to the SDN list.

Consider too the present situation of Iranian shipping. About two years ago, OFAC and the European Commission (EC) added Iran’s main shipowner IRISL to their SDN lists. But IRISL’s managing director Mohammad Hossein Dajmar was quoted in TradeWinds (16 May, 2013) as saying IRISL that still has 164 ships operating in international waters. Even with sanctions, IRISL’s revenues are still nearly $1 billion per year. Given sanctions, IRISL, of course, does not go out of its way to identify its vessels as owned by IRISL and so it has re-flagged and re-named many of them.

On 13 March, 2013, OFAC sanctioned a US-connected marine fuel inspection service, Maritech Commercial Inc. for providing marine fuel inspection services, to vessels which OFAC had identified to be IRISL-owned. The entities contracting with Maritech, of course, seemed to have no Iranian connections, so Maritech didn’t bother to check if the OFAC SDN list mentioned the vessels. If it had checked, it would have found the vessels, but since it hadn’t checked, OFAC sanctioned and fined Maritech.

Similarly, in March 2013, OFAC sanctioned Greek owner Dimitris Cambis and his company, Impire Shipping Ltd alleging that he had purchased Iran-owned tankers and then used them to transport Iran-sourced petroleum products. Cambis insisted that he had no dealings with Iran, and he and his company had no direct US connections. OFAC, however, placed him and his company on the OFAC SDN list, cutting him and his company off from trade with any US-connected entity.

Product ‘laundering’Consider how Iran now markets its petroleum products, attempting to circumvent international sanctions. The ‘laundering’ of Iranian product is now so well known that failing to inquire about the real source of product could be claimed as a defence to sanctions. On 30 March 2013, The Economist said:

‘Iran is in the printing business now … documents are faked to make Iranian oil look as if it came from Iraq. Iraq exports a lot of oil through Iran by lorry. Iranians who handle Iraqi documents can easily copy and reuse them.

‘One way of keeping sales going is to dress up Iranian oil as Iraqi. Another trick is to move Iranian oil onto foreign tankers on

Trade Sanctions

the open sea. Once crews have switched off their ships’ tracking beacons, this is all but undetectable. The oil is sold at a discount. Fujairah is a big market for Iranian oil. … European firms still trade with Iran, using Swiss subsidiaries which broker deals with the Iranians and collect the crude using tankers under the flag of a third country.’

Economic lifebloodPetroleum is Iran’s economic lifeblood. Deception is necessary for survival, and that, plus a profit motive for those considering buying Iranian-sourced product, enables the Iranian petroleum industry and those who supply it, to continue to operate. Certainly the nearer one is geographically to Iran, the less certain one can be that the petroleum products offered for sale are not Iranian-origin products.

On 21 December, 2012, the European Union (EU) issued its Council Regulation (EU) No. 1263/2012, providing that EU sanctions would not apply to ‘the purchase of bunker oil produced and supplied by a third country other than Iran, intended for the propulsion of the engines of vessels…’ Under these regulations, the EU deemed acceptable the stemming of vessels with a blend of Iran-origin crude oil, as long as the ship’s engines used the oil, and that it was acceptable to purchase or transport the Iranian-composite product as long as there was a blend and production of the Iranian product with that of, and in, some third country.

OFAC has issued a sanctions exemption relating to goods containing Iranian-origin raw materials if ‘those raw materials… have been… substantially transformed in a third country by a person other than a United States person.’ OFAC has not specifically applied this interpretation to bunker oil that includes a blend of Iranian crude produced in a third country or indicated whether production of bunker oil from Iranian crude would constitute ‘substantial transform[ation].’

Consequently, it is unclear whether anyone buying bunkers containing some Iran-origin product, even if the bunkers were refined in a third country, would be subject to OFAC sanctions.

Lastly, consider that the Iranian government, or some arm of it, controls most of Iran’s economy. The United States Code of Federal Regulations (CFR) Chapter 31, Section § 560.529 on bunkering and emergency repairs, says:(a) Except as provided in paragraph (b) of

this section, goods or services provided in the United States to a non-Iranian

Risk matrixBunker brokers, suppliers and traders must exercise the highest degree of care to avoid being subject to OFAC sanctions. In 2009, OFAC published its Risk Matrix – factors it would consider to lessen sanctions, if it found that an entity had violated OFAC provisions:

● Management has fully assessed the institution’s level of risk based on its customer base and product lines. This understanding of risk and strong commitment to OFAC compliance is satisfactorily communicated throughout the organisation

● The board of directors, or board committee, has approved an OFAC compliance programme that includes policies, procedures, controls, and information systems that are adequate, and consistent with the institution’s OFAC risk profile

● Staffing levels appear adequate to properly execute the OFAC compliance programme

● Authority and accountability for OFAC compliance are clearly defined and enforced, including the designation of a qualified OFAC officer

● Training is appropriate and effective based on the institution’s risk profile, covers applicable personnel, and provides necessary up-to-date information and resources to ensure compliance

● The institution employs strong quality control methods.

These are standards which OFAC considers to be essential to avoiding sanctions violations and which, if present, OFAC will consider to be reason to lessen any sanctions imposed for what a company insists is an inadvertent sanctions violation.


While a significant amount of Iranian-sourced product remains in the international petroleum market, and while Iran continues to evade OFAC sanctions, OFAC is increasingly likely to turn its attention to marine fuel brokers, suppliers, and traders. It is therefore essential to have an active OFAC sanctions compliance programme.

Violating OFAC sanctions regulations is a strict liability offence with only a few mitigating factors. ‘Honest’ violations will still draw OFAC sanctions. This stands in contrast to the UK’s enforcement mechanism which effectively permits total absolution if there are adequate risk management policies and procedures in place. Even though OFAC takes the strict liability approach, it is essential that entities operating in the international sphere have good risk management practices in place so that any assessed penalty for an OFAC violation is mitigated. Marine fuel brokers, suppliers, and traders thus must adopt internal policies and procedures adequate for their respective business.

At the most basic level, customers (and known related third parties) should be screened via OFAC’s SDN list before any business is transacted. Certainly there

should be no involvement with IRISL-related entities, or with entities which have transacted business with within a sanctioned country in the recent past.

Sales terms and conditions should be edited to be clear that the company cannot, and does not, guarantee anything with respect to potential sanctions, and that the customer is responsible for determining whether the purchased product originated in Iran.

When OFAC turns its attention to marine fuel brokers, suppliers and traders, if there are any questions about whether to make a sale, how to design a compliance programme, or whether a sale has inadvertently violated OFAC sanctions, it is best to consult a qualified attorney to help determine what, and how much, a company should do to protect itself and respond most cost-effectively.

Trade Sanctions

(b) This section does not authorise the pro-vision of goods or services in connection with the transport of any goods to or from the Government of Iran, an Iranian financial institution, or any other person whose property and interests in property are blocked pursuant to § 560.211.

Unwitting violationsUnder these regulations, a marine fuel broker, trader or supplier could be held liable if it bunkered a vessel which was transporting goods to an Iranian government-owned company (which many Iranian companies ultimately are), even if the marine fuel broker, trader or supplier could not have known of the violation.

This section describes a ‘general license,’ only allowing the provision of bunkers / bunkering services ‘in the United States to a non-Iranian carrier transporting passengers or goods to or from Iran…’ Bunkering outside the United States does not enjoy this permission and it is still a sanctionable OFAC violation to provide bunkers or bunkering services outside the United States (e.g. Europe) to any vessel transporting passengers or goods to or from Iran.

‘OFAC is increasingly likely to turn its attention to marine fuel brokers, suppliers, and traders’

RecommendationsWhile no sales terms and conditions guarantees exemption from OFAC or other sanctions, we have drafted and recommend the following to our clients:

● Buyer warrants that the nominated Vessel and, if the above Vessel is a bunker barge or lighter, the Vessel(s) which will ultimately consume the Products delivered under this Agreement, is / are not: (i) designated in any sanctions list issued by the United Nations, United States, and/or European Union; and/or (ii) owned or controlled by any person or entity registered in or operating from Iran or Syria or designated in any sanctions list issued by the United Nations, United States, and/or European Union.

● Buyer further warrants that the Vessel is not destined for Iran, and that any cargo and/or goods aboard the Vessel are not destined for the Government of Iran, an Iranian financial institution, or any other person whose property and interests in property are blocked pursuant to 31 C.F.R. § 560.211 of the US Code of Federal Regulations. Buyer agrees to indemnify and hold

Seller harmless for any sanctions and/or financial penalties assessed against Seller resulting from a violation of this Clause.

● In respect of any Products to be supplied by Seller, Seller affirms that the Products do not contain any crude oil or petroleum products that Seller knows, or has reasonable cause to suspect, to have originated in or been exported from Iran or other sanctioned countries. SELLER PROVIDES NO WARRANTY, EXPRESS OR IMPLIED, WITH RESPECT TO THE ULTIMATE ORIGIN OF THE PRODUCTS BEING PROVIDED TO BUYER.

● Seller and all its offices and dedicated agencies abide by international trade sanctions regulations, including those of the United Nations, United States, and European Union. Seller reaffirms that it will abide by all international trade sanctions to the best of its ability, and that in accordance with any applicable sanctions legislation, Products supplied by Seller will not under any circumstances have an Iranian Certificate of Origin.

● Seller warrants that, to the best of its

knowledge, the Products to be supplied to the Vessel are not (i) sourced by any country or countries that are on any sanctions lists issued by the United Nations, United States, and/or European Union; and (ii) owned or controlled by any person or entity registered in or operating from Iran or designated in any sanctions issued by the United Nations, United States, and/or European Union.

● To the best of Seller’s knowledge, without prejudice, Seller understands from its usual Suppliers and/or ex-wharf sellers that their source of oil which Seller has requested to load out from their nominated terminals are not of Iranian Origin nor that they have been exported from Iran.

● Seller has an internal company policy where it does not knowingly or deliberately deal with Iranian origin product, and Seller has informed its suppliers accordingly. Seller exercises all necessary due diligence to ensure that the any Products it supplies will not directly or indirectly originate from Iran, and Seller also does not deal with Iranian counterparties or their counterparties under any circumstances.


detail. Industrial installations and the aviation industry already fulfil mandatory requirements for measurement and reporting and these are almost entirely electronic. For the shipping industry, the technology already exists. The big step is in gathering support.

There is ample reason for shipping to support electronic measurement and reporting, as there are significant commercial gains to be made by implementing these systems. Electronic solutions read data directly from fuel flow meters, consumption and emissions, and are monitored automatically. The results are therefore visible in shipowners’ offices all the time without additional man hours for crews. In other words: greater accuracy with more efficient resources.

Real time reportingCompared to noon reports alone, continuous electronic reporting also has a dramatic advantage in vessel safety and risk management. Nowadays, even a minor vessel incident can appear on Twitter, blogs, YouTube and 24-hour news channels within minutes of occurring. It has, therefore, never been more essential for an owner or operator to be absolutely aware of its fleet’s status at any given moment. Choosing real

Technology Update

Communication between ship and shore is

changing. Esa Henttinen looks at how new

technology can benefit the industry

Effective communication between shore-based shipowner and operator offices and their fleets is

critical to ensuring global shipping runs smoothly and profitably. Technology is constantly evolving, yet the industry standard for communicating vital information from the ships at sea – daily ‘noon reports’ – has remained unchanged for decades.

However, change is coming. A European Commission (EC) statement in December 2012 stated that: ‘Monitoring of carbon dioxide (CO2) emissions and energy efficiency can build on data monitored onboard most ships and on documents which are already today required or available, such as log books, bunker delivery notes or noon-reports. Building on these existing elements seems to be recognised by many stakeholders as a reasonable approach as the additional administrative burden for crews and shipowners should be minimised.’

Beyond the traditionalPapers were also presented at both International Maritime Organization’s (IMO) Marine Environment Protection Committee (MEPC) meetings in 2012, on monitoring and the EC has declared its intention to pursue mandatory monitoring, and the mandatory reporting and verification (MRV) of vessel fuel consumption. Regulators are more likely to ensure that effective monitoring and control of vessels is in place across the industry, and that monitoring should go beyond traditional noon reports.

Electronic measurement and storage of data is the sensible choice for major industries, as it provides high levels of accuracy and

The future is electronic‘Nowadays, even a minor

vessel incident can appear on Twitter, blogs,

YouTube and 24-hour news channels within minutes of

occurring’

Esa Henttinen is Executive Vice President, NAPA for Operations

Contact:Esa HenttinenTel: +358 9 22 8131Email: [email protected]: www.napa.fi


and allowed Bore to make effective business decisions regarding potential retrofits on other vessels.

Safety, fuel efficiency, operating profile and the understanding of the benefits of onboard technology can all be improved through effective measuring, reporting and verification. That is precisely the reason that regulators are looking to ensure that all vessels have a process in place for obtaining this data.

NAPA research from 2012 showed that owners, managers and operators with large fleets were increasingly turning to electronic operational solutions that automatically communicate with shore-based offices, undoubtedly because it is the most effective and time-efficient way for this to be achieved. Parts of the industry are already embracing this technology; the question is how long can traditional noon reports survive in the face of increasing pressure from regulators, charterers and competitors?

time communication between ship and shore provides instant awareness of a vessel’s location, the weather conditions, its speed, and further data that can help to ensure that vessels are operating to the safety standards expected by owners, operators, charterers and other stakeholders.

Charterers’ expectations, in particular, have risen as their processes have become more rigorous. Most charterers have always closely examined fuel spend, speed and vessel routes, but now they are reporting on these in increasingly sophisticated ways. As shipowners and managers’ fuel costs and environmental and safety credentials are put under the spotlight, more transparent, accurate and up-to-date data are being requested and shared between owner, charterer and manager.

Reduce the burdenElectronic monitoring provides this without

Technology Update

adding extra duties for crews already burdened with significant amounts of paperwork. This information also has the advantage of being easily analysed, compared against established performance and able to use normalising algorithms to remove the effects of wind, waves and other environmental conditions, to provide accurate and easily digestible information about the vessel.

Electronic measurement of technology effectiveness also improves simplicity and accuracy. When the Finnish shipping company Bore wanted to verify fuel savings from retrofit efficiency solutions on its Ro-Ro vessel, M/V Bore Sea, NAPA software was used to record improvements in fuel consumption. By continuously monitoring the efficiency, speed, location and other contributing factors onboard before and after the installation of these solutions, shore-based Bore staff could measure the savings and how they were achieved. The systems were deemed effective in reducing fuel spend

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The future is electronic


Compliance is a word which has become so frequently used within the shipping industry that

it almost takes precedence over all other day-to-day aspects of the running of a vessel.

Shipowners and operators must consider issues such as engine efficiency as well as possible sulphur oxide (SOx), nitrogen oxide (NOx) and carbon dioxide(CO2) emissions as part of an ever-growing list of requirements. In a sea of bureaucracy, legislation and red tape, all other considerations can often sink below the surface.

If we were to approach shipowners today and ask what constitutes their biggest financial outlay, the chances are the universal response would be fuel costs.

Compliance has, of course been at the forefront of owners’ and operators’ minds since the introduction of MARPOL Annex VI and it has remained of paramount importance following a series of subsequent legislative changes. During this time, the idea of compliance has always focused on the overall sulphur content of the product purchased and used onboard, with a close eye being kept on fuel quality. However, the forthcoming changes regarding sulphur content in fuel (in 2015 and 2020/2025) are set to add another hurdle in the form of availability of compliant fuel.

The requirements to be introduced are the most significant since the implementation of MARPOL Annex VI, and also look to be by far the most challenging.

The most pressing issue comes with the expected change within emission control areas (ECAs) on 1 January 2015. The reduction of the sulphur content of fuels being used in ECAs from 1.00% to 0.1% will prove to be a huge turning point for a very large proportion of owners and operators the world over, as this particular legislative change brings with it the distinct possibility of a reduced availability of appropriate fuel.

Prior to the introduction of the North American ECA, only a relatively small number of owners and operators were affected by localised requirements due to the limited size of the existing ECAs.

Given this situation, previous legislative change relating to ECAs has not been viewed as such a radical step and, although problems were noted during transitional periods, they were quickly addressed and rectified.

The whole sequence of events surrounding progressive change has been a very steep learning curve for all parties, and the proposed drop from 1.00% to 0.1% signifies a major shift in requirements for the

industry as a whole. If we simply consider the ‘traditional’

marine fuels (residual and distillate) in relation to the requirements for 2015, the general consensus is that compliance will be achieved using ultra low sulphur marine gasoil (MGO), and heavy fuel oil (HFO) will be reserved for use outside the controlled areas. As such, demand for distillate fuels will increase dramatically whilst the need for 1.0% high sulphur fuels will cease almost overnight.

In an ideal world this transition would be seamless and trouble free but the reality of such a step will prove to be very different. The questions raised in relation to the available quantities of distillate fuels have been discussed at length and figures have been provided which suggest that sufficient quantities will be available to meet the 2015 requirements.

However, such statements do not provide a wholly accurate assessment of the situation. There may well be sufficient quantities to meet the expected demand for compliance within the ECAs but will this fuel be readily available in all ports? The short answer to this question is likely to be ‘no’.

The physical availability of ‘compliant’ fuel in the major bunker ports across the world is unlikely to be too problematic, with many Northern and Western European ports already in a position to supply significant quantities of 0.1% MGO based on current European Union (EU) requirements. However, the implementation of the North American ECA has introduced many ports to the concept of compliance and the need to provide a specific level of product – which may well be beyond their capabilities.

Taking this into consideration, the next logical step must be to ask what effect this will have on the market as a whole and the quality of the product available. If we look at how the market stands today, then the requirements for 2015 cannot physically be met. Were shipowners and operators to adopt the 2015 ECA requirements tomorrow they would be faced with an estimated fuel deficit in the region of 20 million-30 million metric tonnes (mt). If we then look to the proposed 2020 requirements for global emissions based

As SOx deadlines approach, Michael Green

of Intertek confronts the question of compliant fuel

availability

Fuel Supply

Meeting targets‘If we look at how the

market stands today, then the requirements for 2015 cannot physically be met’

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


Both of these ideas have proven their worth but, in the short term, it is fair to say that scrubber uptake has been very limited, whilst the infrastructure required to support LNG as an outright bunker fuel is still in its infancy.

If we look towards 2020 and the global sulphur reduction target, a much clearer picture emerges where technologies such as scrubbers and LNG have the potential to come into their own. The removal of the requirement for 1.00% sulphur residual fuel will put a stop to large scale blending operations which, in turn, will go some way towards eradicating stability issues and cases of contamination. The increasing efforts in regions such as Amsterdam-Rotterdam-Antwerp (ARA) in developing LNG capabilities will encourage a willingness on the part of owners and operators to look more closely at dual fuel technology, particularly in light of further legislative requirements.

on exclusive use of distillate fuel then an estimated additional 250 million mt will be required.

As already noted, Northern and Western European ports already have a great deal of experience in the supply of 0.1% distillate fuels, but the majority of this product is imported which clearly has an impact on costs.

Changes in refinery processes to accommodate the extra demand adds extra costs to the final product, which again drives up the price for the user. As a result, the cost differential between distillate and residual fuels will continue to increase.

Taking these points into consideration and looking beyond the remit of traditional bunker fuel, it is reasonable to ask whether there is a viable alternative that can seriously be considered instead of distillate fuel with regard to 2015. Again, the short answer to this would be ‘no’.

Although a great deal of effort has been made on the development of alternative technologies, none have progressed sufficiently to stake a claim to be a true alternative to the use of distillate fuels. In looking at the key available technologies, a strong focus has been placed on the application of scrubbers and the progression of liquefied natural gas (LNG) as a bunker fuel for non-LNG carriers.

Fuel Supply

‘The reduction of the sulphur content of fuels being used in ECAs from 1.00% to 0.10% will prove to be a huge turning point for a very large proportion of owners and operators’

Through our Network of Exclusive Suppliers Very competitive prices Any quantity large or small delivered by rtw or barge with minimal notice time required

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benefits in comparison to tradition marine fuels. Carbon dioxide (CO2) emissions are reduced by 20%-30%, sulphur oxide (SOx) emissions are eliminated, and nitrogen oxide (NOx) and particulate matter (PM) emissions are significantly lowered.

In Stockholm, the new Viking Line ferry, the Viking Grace, has already signed up for AGA’s Seagas LNG bunker delivery service.

Each day, the Viking Grace, comes into port at 6.25 am. Refuelling when the ferry is moored at Stadsgärden takes around 45 minutes and the ferry is ready to return to Finland by 7.35 am. Normal heavy fuel bunkering can take hours, so, as AGA’s Åkermark explains: ‘This is a Formula 1 pit stop in a shipping context.’

Seagas is a product of the Clean Energy Group within AGA, and the vessel was built in Norway and launched in March 2013. It is operated by Sirius Shipping AB with a crew of three and is based in Loudden in Stockholm.

On an operational basis, two to three trucks come each day from AGA’s LNG terminal at Nynäshamn and bunker the Seagas with up to 70 tonnes of LNG.

‘The service has been up and running since the beginning of April, and Viking Line has been very satisfied so far,’ says Åkermark.

The risk with using LNG as fuel lies with the handling of the fuel, not onboard transportation. The Seagas has a well-trained and educated crew so the risk is minimised when they connect to the Viking Grace.

LNG Issues

Bunkerspot takes a closer look at Seagas, AGA’s

new LNG fuelling vessel operating in Stockholm

The new liquefied natural gas (LNG)-fuelling tanker, Seagas, entered service in April in

Stockholm. It is the first of its type in the world and classified under the same regulations that apply to ocean-going LNG tankers, and its owner, AGA Gas AB, believes the operational potential of this unique vessel is considerable.

All vessels entering the Baltic Sea and the North Sea must comply with the Sulphur Emission Control Area (SECA), the European Union directive that stipulates that all ships must reduce their sulphur emissions from the current level of 1.00% to 0.1% by 2015.

One route to compliance with these sulphur regulations is to switch to an alternative fuel, such as LNG.

‘LNG is a natural alternative to heavy and marine gasoil,’ says Jonas Åkermark, Product Manager, AGA LNG Marine Market. ‘I believe the future looks good.’

LNG is, of course, not a new fuel. It has been used for over 50 years to power ships’ engines. It is a combustible mixture of gaseous hydrocarbons which is colourless, non-toxic, odourless, and lighter than air. Its main component (90%) is methane.

When the gas is cooled to -162oC it is converted to a liquid and its volume decreases around 600 times. This, therefore, allows more efficient transportation than if the gas had been transported in a gaseous form.

LNG offers significant environmental

Rapid response

Contact:

Web: www.aga.se


Because this is the first time that LNG has been used to refuel an international ferry, it took time to receive approval from the relevant authorities. AGA applied for approval in 2010 and it finally came through in 2012. The risk assessment was performed by SSPA Sweden and AGA.

In future, the ambition is to service more vessels coming into Stockholm with LNG and perhaps add some more bunkering vessels. ‘We have the supply,’ says Åkermark. ‘There is room to expand.’

LNG Issues

‘The ambition is to service more vessels coming into Stockholm with LNG and perhaps add some more

bunkering vessels’

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recent incidents, and reflecting on outcomes of some of the hijackings, it is likely that pirates in Southeast Asia are opportunists with scant knowledge of tanker operations, and lack sufficient planning to guarantee ship-to-ship (STS) transfer.

In some of the hijackings, pirates either had trouble rendezvousing with a lightering tanker, or failed to complete the STS operation due to apprehension by regional authorities. This happened on two notable occasions in late 2012, when the tankers (Zafirah and Scorpio) were hijacked and then tracked down and thwarted by Vietnamese and Malaysian maritime authorities respectively. In the case of the Scorpio, which was hijacked off Malaysia, pirates attempted to arrange the sale of both the fuel oil and the vessel itself while steaming in the Singapore Straits: not the modus operandi of a highly organised criminal syndicate and certainly not traits of an operation in which buyers are lined-up beforehand.

However, two recent hijacks (of the Arowana United and the Zafirah) have demonstrated a marginally more pre-determined business model which might lead some to believe that criminal syndicates are once again targeting shipping in the region. In both incidents, pirates, once in possession of the vessel, repainted the name and altered the International Maritime Organization (IMO) number in an unsuccessful attempt to render the vessel anonymous to authorities. Likewise, in both cases pirates initially tried to sell the vessel while underway, before eventually attempting to transfer the fuel oil (bunkers) to a smaller tanker. This was successful in the case of the Arowana United. It could be interpreted as evidence that pirates are attempting to upscale their operations in order to target petroleum cargoes. With reports of fuel smuggling in the South China Sea recently, and calls from politicians in the area to address illicit fuel movement, it is possible that criminals might begin to see tanker hijack for cargo theft as a viable and

‘It is likely that pirates in Southeast Asia are

opportunists with scant knowledge of tanker operations, and lack sufficient planning to

guarantee ship-to-ship transfer’

The majority of maritime crime in Southeast Asia continues to occur at anchorage against

crew members and ships, with valuables and ship stores the common target for criminals. The focus of this article, however, is not small scale crime at anchor – but piracy, defined as vessel hijack and cargo theft, of which there have been several cases in the last six months.

While a marginal rise in piracy in 2012 might, on the surface, look like the rumblings of more organised criminal operations in Southeast Asia, the success rate has been low, throwing into considerable doubt the capability of perpetrators in the region. Recent incidents appear to be the work of opportunists, not highly organised criminals, with only one case that could be regarded as sophisticated (Arowana United in October 2012). However, with an entrenched network of criminal syndicates in the region, a return to maritime crime is always a possibility in Southeast Asia.

The region has long been prone to piracy. It is only following the pan-Asian response to maritime crime – notably in the trilateral MALSINDO (Malaysia, Indonesia and Singapore) agreement in 2004 – that the occurrence of hijack in the Malacca Straits and Indonesia was reduced. Prior to the agreement, intelligence-led hijack for vessel re-sale was widespread, which rendered the region high risk for crew, charterers and tanker operators. That is why a number of piracy incidents from September 2012 to February 2013 could be interpreted as a re-emergence of organised criminal activity in Southeast Asia. This notion is reflected in figures and reports showing that in the last six months there have been six cases of vessel hijack, including two cases in which fuel oil has been illegally siphoned from bunker tankers in the waters of Southeast Asia.

However, the majority of the incidents have either led to the apprehension of pirates, or the incomplete transfer of bunkers, shedding some light on the proficiency of pirate groups in the region. Of the six incidents in which pirates hijacked vessels, there have only been two successful transfers of fuel oil to a lightering tanker. In addition to this, the quantities of bunkers stolen and size of vessels hijacked have been small in comparison to cases of hijack for cargo theft in West Africa. Such facts belie the notion suggested by some media reports that Asian pirates are highly organised, intelligence-led syndicates, comparable to their counterparts in the Gulf of Guinea. Looking closely at

Piracy Trends

Philip de Burgh of Gray Page discusses the

problem of bunker fuel and oil cargo theft in SE

Asian waters

Organised crime?

Established in 2003, Gray Page is a specialist maritime intelligence, investigation and risk management company. It provides a full range of risk management services, including claims and litigation support, investigative due diligence, armed maritime and security provider vetting, crisis response and management, expert witness and asset protection.

Contact:Gray PageTel: +44 1865 861400Web: www.graypage.com


operations into maritime fraud and hijack for cargo theft. However, if the recent incidents are anything to go by, the criminal model is rudimentary and without the means to seriously threaten cargo interests and vessel owners.

Accordingly, in the near future, it is likely that barges and vessels will suffer small scale maritime crime whilst calling in the region, continuing the trend seen in the last five years.

‘A turbulent history of piracy has strengthened

multilateral ties and galvanised an efficient regional policy toward

piracy’

incident, including the Vietnam’s People’s Navy (VPN), the Vietnam Maritime Security Information Centre (MSIC) and the Vietnam Maritime Police (VMP). Likewise, recent cases of fuel smuggling in the region have been quickly foiled by the Malaysian Maritime Enforcement Agency (MMEA) which tracks illegal movements of fuel. Pirates brazen enough to attempt vessel hijack and cargo (or bunker) theft in 2013 will pit themselves against such authorities.

Of particular significance in these cases is the use of tactics that, if developed and honed, could lead to the emergence of more serious criminal undertakings at sea, particularly against the tanker market in the region. On a yearly basis, more than half of the world’s seagoing traffic passes through Southeast Asia, including oil and product tankers.

Criminals will not be short of opportunities if they wish to develop their

Piracy Trends

financially rewarding criminal model (as is prevalent in West Africa).

Based on recent events, however, it would require a more organised criminal network to be successful in hijack for cargo theft, particularly to outwit the counter-piracy response in the area. National authorities (Malaysia, Indonesia and Vietnam in particular) and the reporting centres such as the International Maritime Bureau (IMB) and the Regional Cooperation Agreement on Combating Piracy and Armed Robbery against Ships in Asia (ReCAAP) have become increasingly effective counter-piracy instruments. A turbulent history of piracy has strengthened multilateral ties and galvanised an efficient regional policy toward piracy. For instance, once the hijack of the Zafirah had been reported in November 2012, five separate counter-piracy bodies were able to respond in a coordinated and effective manner to the

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Conference callEvent Focus

The annual Maritime Week Americas provided

a valuable forum for the bunker industry to debate

key challenges and opportunities

whilst it waits for the United States to come back as a consumer economy. Before the global economy can recover, he warned, the ‘cycle of political dysfunction’ must be broken, and major powers, such as the United States, must act decisively to put their fiscal policies in order.

The shipping sector remains in a parlous state, with plummeting vessel asset values and a beleaguered and seemingly paralysed financial sector. Stebbins flagged up the $350 billion in shipping loans currently lodged with European banks. ‘People talk about sovereign debt but shipping is worse,’ he said.

Al Canal, Chief Financial Officer, Bunkers International, also spoke of the slow path to recovery in the United States and the Eurozone, and the financial pressures on the shipping sector that are compounded by low freight rates, high fuel costs and fleet finance charges. He gave a stark illustration of the daily financial burden carried by owners and operators. A new ship purchased in 2006 for $30 million with a 40% deposit and a 10 year loan is currently carrying daily operating and mortgage costs of $12,250 but achieving charter rates of only $9,000 a day. The vessel itself, given today’s depressed asset values, is now worth $15 million.

Yasushi Nakamura, Executive Vice President, ClassNK, in his presentation to the MWA – Ship Efficiency conference, also noted how the weighting in shipping costs has changed over the past 10-15 years. Whereas in 1999, the ship price was the key factor in a vessel’s lifetime costs, now fuel costs are the major consideration.

In the light of the financial fragility of a good many owners and operators, Paul Millar, Managing Director of Bominflot Ltd gave a timely reminder to bunker suppliers to keep a firm focus on the credit worthiness of their customers.

Pay attention to market intelligence, he noted, be wary of traders with higher risk profiles, and give greater consideration to the bank support a customer may be receiving that may be getting him through the financial crisis.

Millar also sounded a note of caution when supplying to a number of companies within a larger organisation: ‘Consider your consolidated exposure to a group – you may be selling to numerous companies within one group.

‘And if you are a bunker supplier with various operating companies, with multiple credit lines, your potential exposure could be frightening.’

Millar warned of the dangers of bunkering a vessel owned by a company

Topical, incisive and productive debate is always a feature of Maritime Week Americas (MWA

2013). This year’s event, held in Miami, certainly lived up to expectations, giving conference attendees a series of challenging and hard-hitting presentations on a wide range of issues relevant to the bunker, port and environmental sectors.

The week-long show also featured highly-focused workshops and training sessions on commercial practice in bunkering, the use of liquefied natural gas (LNG) as a marine fuel, and the management of bunker claims, as well as a seminar on bunker price risk management which did much to debunk the perceived complexity of using hedging tools as part of the day-to-day management of a bunker supplier’s financial operations.

The continuing blight of failing national economies and the on-going financial and operational woes of the shipping sector underpinned many of the conference presentations. The bunker supplier’s daily battle to juggle issues such as credit management, and regulatory, environmental and technical compliance in the face of high bunker fuel prices was brought sharply into focus.

On a macro level, the supplier is also at the mercy of changing global trade flows and rapidly evolving global patterns of energy production. It really is a brave new world out there at the moment for the bunker sector, and how to second guess what will happen in terms of trade, finance, and regulations is a very difficult call indeed.

What came out of MWA 2013, however, was that while the bunker industry may be struggling to keep pace with the changes caused by global economic volatility, the fact that fuel costs currently account for the major portion of a shipowner’s or operator’s costs means that the supplier has a pivotal role in supporting world trade. More than one speaker at the conference suggested that fuel supply companies were now in a position to give key support to the shipping and, indeed, financial sectors – a turn of events that would have been unthinkable 20 years ago.

Paul Stebbins, Executive Chairman, World Fuel Services Corp., opened the conference with a keynote speech that was, as anticipated, hard-hitting, pragmatic – and certainly sombre.

He spoke of the global ‘accelerated trajectory of credit and debt’. Even China, for so many years the world’s economic powerhouse, is storing up debt. However, it has to keep the game going, said Stebbins,


Event Focus

in a country subject to sanctions – perhaps introduced to the supplier by a trader or a charterer – and he recommended using a sanctions search facility offered by a number of companies.

The complex issue of sanctions compliance was extensively and clearly explained by Steve Simms, Principal of Simms Showers LLP. Focusing on US trade sanctions against Iran, he called on bunker suppliers to be aware of the dangers of contravening US Office of Foreign Assets Control (OFAC) regulations over trading with Iran. Falling foul of these regulations could effectively ‘black list’ a supplier, he warned. ‘If your company is sanctioned, OFAC will add it to its Specially Designated Nationals list, and once you are on that list, no entity which wants to avoid sanctions will want to do business with you.’

Staying with issues that could have considerable financial repercussions for the bunker supplier, Angel J. Minetto, Vice President, Air & Sea Insurance Corp., gave a valuable reprise of types of bunker claims, and stressed the importance of reading the small print of terms and conditions (T&Cs) and ensuring accurate disclosure of information on the all-important bunker delivery note.

Christel McLoughin, Director of Risk Management, KPI Bridge Oil, also marched conference delegates firmly into the area of bunker risk management – territory that many bunker suppliers seem still very reluctant to enter. ‘Risk management is a new and necessary approach to energy procurement,’ she said. While suppliers are unable to control the vagaries of oil price movements, they can hedge bunker costs, she suggested, and went on to discuss financial instruments such as swaps, futures, and options – key components of a good bunker risk management ‘tool box’.

There are some geographical hot spots for suppliers, however, within the general economic gloom. Energy demand and trade exports are growing in many Latin American countries, and the expansion of the Panama Canal should generate tangible business opportunities for owners, operators, and bunker suppliers.

Martha Lucia Baron Fonseca of Ecopetrol gave a fascinating overview of the Colombian market, where port traffic has doubled between 2009-2012 and where exports now account for some 72% of cargo passing through the ports. Martha also gave a useful update on the modernisation of Ecopetrol’s refineries at Barrancabermerja and Cartagena.

Capt. Paul Gallie, Managing Director, APM Terminals Moin, gave conference delegates a real insight into the challenges facing ports as they seek to update often outdated infrastructure in order to embrace new trading opportunities. The Panama Canal expansion project is ‘good news’ for all the countries in the region, but ports such as Moin in Costa Rica are having to step up to the mark very quickly. With a port infrastructure that Gallie described as ‘two generations behind the curve’, and the reality that Costa Rica is, amongst other things’, the world’s largest pineapple exporter – supplying 82% of the US/European Union market – construction of a new terminal at Moin is essential.

With construction slated to start towards the end of 2014, Moin will become a deepwater port able to accommodate the larger vessels that will support Costa Rica’s burgeoning trade links. It is estimated that the new terminal will increase the country’s gross domestic product (GDP) by one percentage point.

MWA 2013 also confronted environmental questions in some informative sessions.

Addressing the opening session of the conference, Andreas Chysotomou, Chairman of the Marine Environment Protection Committee (MEPC), International Maritime Organization (IMO), stressed that: ‘The [shipping] industry needs to be given incentives to achieve the environmental aspirations of the regulators and at the same time to use synergies that will lead to cost effectiveness and efficiency improvements.’

Meeting current and upcoming sulphur regulations was, of course, a key theme. Ronan Kavanagh, Senior Correspondent, Energy Intelligence, talked about a possible low sulphur fuel supply crunch and pointed to the fact that many refiners are not inclined to desulphurise.

In a detailed US market overview, Lucretia Cardenas of Platts, also monitored the relationship between 1.0% and 3.5% sulphur bunker fuel, and asked ‘how narrow will the premium become as industry prepares for 2015?'

Many speakers addressed fuel compliance, availability and quality issues.

Hauk Wahl, Regional Manager, DNV Petroleum Services, pointed to recent problems in the use of low sulphur fuel and shale oil, such as sludge build-up in purifiers. Even though fuel quality May meet the basic ISO 8217:2010 standard, it could still cause major problems onboard vessel, he warned.

Srinivasan Chandrasekkhar, Technical

Director of Viswa Lab, also agreed that compliance with ISO 8217 is no guarantee that contaminants will not be present in fuel. He said that costs associated with main engine damage have escalated by 52% since 2004, and some 80% of machinery problems are now related to fuel and lubricants.

MWA stalwart and industry guru Nigel Draffin of LQM Petroleum Services Inc. led a sharply focused roundtable discussion which addressed many of the key concerns within the bunker industry in relation to regulatory compliance within Emission Control Areas (ECA). With an eye on the North American ECA, he posed the question: ‘Do we comply using distillates, abatement or new fuels?’

Draffin noted that the use of 1.0% sulphur fuel oil has taken much longer to ‘bed in’ within the North American market than in Northern Europe. While the US East coast and Gulf coast have managed to find the right products, the West coast ‘has struggled with very low viscosity, low density and high premia’.

For those who opt to use distillate fuel, Draff in reminded delegates that the experience of the Californian Air Resources Board (CARB) over fuel switchover has highlighted weaknesses in equipment, competence and procedures.

The use of abatement technologies, such as scrubbers, was debated but the feedback from delegates and speakers suggested that uptake would be slow in the short term. High installation costs and a delay in return on investment – when set against an unstable economic outlook – look set to defer any widespread uptake of this technology.

While much hype surrounds a switch to alternative fuels, such as LNG, in the North European market, the North American appetite for such fuels seems much more lukewarm – judging by the response from MWA delegates. While the use of LNG may eventually find advocates in the domestic ferry and liner sectors, the jury is still very much out on its prospects for international shipping routes.

Delegates came away from MWA 2013 having gained an impressive body of knowledge. And networking was, as always, spectacular! The evening social events, hosted by Bunkers International, KPI Bridge Oil, OW Bunker, BP Marine and Ecopetrol, served once again to remind all delegates what an interesting – and fun loving – community the bunker sector really is.

Next year, MWA happens all over again – roll on Panama!


The HSSE function is responsible for: ● Establishing requirements and procedures,

including incident response plans and post-incident reporting and analysis

● Coordinating and promoting HSSE-focused culture in the organisation

● Monitoring all laws, rules, and regulations which may impact the organisation

● Ensuring the physical security of vessels and facilities is optimised for existing conditions

● Ensuring staff and crews are trained and equipped to counter risks

● Working with industry and government entities to share information and best practices

● Ensuring the organisation is aware of the risks and taking prudent steps to mitigate and counter threats to personnel and facilities.

Other than in governmental and non-governmental organisations, we rarely see a senior level function dedicated solely, for example, to security functions and responsibilities.

There are no established criteria for specif ications for these roles. We are seeing

‘Trade patterns, cargo characteristics, vessel

and terminal infrastructure are rapidly improving to take advantage of

newer technologies and economies of scale’

Across the maritime industry there is a greater responsibility on companies to ensure that they

are effective in their management of health, safety, security and environmental (HSSE) affairs. Whether you are a bunker supplier, trader or distributor, there are a growing number of rules, regulations and risks facing firms that require specialist resources to manage.

Safety and security knowledge and professionals are needed across all sectors of the industry. We are managing requirements for a variety of clients. Shipowners, port authorities, bunker suppliers, and third-party service providers all have requirements at different levels within their organisations. These requirements range from vice president, director, manager, through to analyst roles.

There are many industry and governmental organisations and non-governmental organisations (NGOs) setting standards and looking to share best practice and intelligence in the security f ield in particular. Commercially, we have seen individual client companies manage safety and security issues at various levels in their organisation and with differing degrees of focus. We see a trend where security is being incorporated into the responsibilities of the health, safety, and environmental functions.

HSSE functionality is increasing with owners taking the lead on merging the responsibilities. These added responsibilities ensure that the HSSE functions are an integral part of the business planning and operating performance of an organisation.

Rory McGuire of Flagship Management looks at the growing need for

health, safety, security and environmental

professionals in shipping

Recruitment Issues

Safety first

Rory McGuire has over 17 years’ experience in the maritime industry. He has advised the Irish government on maritime policy, and has advised government representatives in Europe, the Middle East and South Africa on specialist maritime taxation. He was closely involved in the development of legislation for the introduction of the Irish tonnage tax, as well as supervising the development of shipping finance schemes.

Flagship Management is the maritime industry leader for executive recruitment. All its principals and associates are maritime professionals with experience gained at sea and ashore and it has provided industry knowledge and policy guidance to several government and non-government organisation (NGO) agencies. It has offices throughout the United States and Ireland.

Contact: Rory McGuire, PartnerFlagship ManagementTel: + 353 1 905 9100Email: [email protected]: www.flagshipmgt.com


nefarious practices requires a close working relationship with authorities who are fully focused on broader security issues. An understanding of intelligence-gathering as well as post-incident analysis is required. Being able to sort through the volumes of data available to identify actionable items is a key component of success. The ability to outsmart the ‘bad guys’ and stay one step ahead is always desirable.

Corporate HSSE management is a dynamic and developing role. The world is changing: trade patterns, cargo characteristics, vessel and terminal infrastructure are rapidly improving to take advantage of newer technologies and economies of scale.

These improvements bring new challenges for organisations and the people selected to address them. A broad skillset, a desire to stay focused, and the ability to drive a culture are characteristics of a successful security professional.

professionals from different disciplines occupying the HSSE positions. Previous experience as a ship’s off icer in a senior capacity is often desired. This can be time at sea either as a deck or engineering off icer. A university degree and more than 10 years of experience is usually required for manager-level roles and above. Prior experience managing HSSE functions in a maritime environment at sea or ashore is desirable.

The roles come with broad responsibilities overseeing everything from health and safety matters through to cargo security. Depending on the nature of the cargo, the level of activity and focus changes. The HSSE professional is the subject matter expert for ‘all things security’ ranging from cargo security, anti-piracy, and anti-traff icking efforts. When combined with health and safety issues, it becomes obvious that an HSSE professional must possess a broad skillset.

Technology and an understanding of its applications are added benefits for anyone considering a career in maritime security. The use of video, electronic, and other technologies is growing across all cargo segments. With a wide range of products and services available, knowing what works and what doesn’t is critical. Employing assets properly and effectively is a key skill for a corporate security professional. Being able to balance the cost and benefit of security measures against the perceived threat and possible f inancial consequences of an incident is a management requirement.

There is an expectation that a security professional will build or possess a network of contacts, and an understanding of intelligence gathering capabilities. The corporate HSSE professional must be able to maintain relationships with both local and international security and law enforcement organisations. Staying abreast of threats and

Recruitment Issues

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Networking

On the move... Europe Peter Grunwaldt has left Chemoil Energy Ltd in London following the recent departure of Rene Duyn from Chemoil Europe B.V. in Rotterdam and the January departure of a number of traders from its Singapore office.

Matthew Pilgrim and Nelson Peace have joined OceanConnect Marine UK Ltd as bunker traders while Damian Landi has joined as Financial Controller. Tel: +44 20 7553 6700; Fax: +44 20 7900 3331; Email: [email protected]. Pilgrim Mob: +44 7944 125 687; Email: [email protected]; Peace Mob: +44 7720 287 200; Email@ [email protected]; Landi Mob: +44 7904 664 771; Email: [email protected].

After 14 years as shipping credit risk analyst for Lloyd’s MIU, Stelios Makris has been appointed Group Credit Risk Manager for Rudder s.a.m. in Monaco. Tel: +377 9797 6970; Direct: +377 9797 6977; Mob: +33 6 4391 4017; Email: [email protected].

Poland’s Ship-Service SA has announced that bunker trader Katarzyna Kata is on maternity leave. Barbara Ogiejko continues to handle trading issues, while Joanna Domagalska has joined the bunker department as a trainee. Tel: +48 91 431 8950; Mob: +48 601 707 981; Email: [email protected] or [email protected].

Maersk Line has announced the appointment of Stephen Schueler, previously of Microsoft and Procter & Gamble, as its new Chief Commercial Officer, succeeding Lucas Vos who stepped down on 1 May.

Dan-Bunkering (Monaco) s.a.m. has appointed Nicolai Baden to its Monaco team. Tel: +377 9777 6330; Mob: +33 6 40 62 89 66; Fax: +377 9777 5301; Email: [email protected].

BMS Bunkers in Greece has appointed Alex Chui as a bunker trader in its Far East focus team. Tel: +30 210 4101 280; Mob: +30 698 4555 955; Email: [email protected].

Mideast & Africa

Cockett Marine Oil DMCC has relocated to Office 2801-2805, 28th Floor, Jumeirah Bay X3, Jumeirah Lakes Towers, PO Box 625751, Dubai, United Arab Emirates. Tel: +971 44 255 100; Fax: +971 44 255 111; Email: [email protected].

GAC Bunker Fuels has appointed Ashan Silva, most recently General Manager Operations for GAC in Sri Lanka, as its new Business Development Manager for the Middle East, Asia Pacific and Indian Subcontinent, based in Dubai. Tel: +971 4 435 3200.

International Bunkering Middle East DMCC has promoted Mahsa Alavipoor and Ajay

Menon to senior bunker traders and has also appointed Kim Gade, Fernando Manuel Tirado Lenador and Abdur Rahman as bunker and lubricant traders in its trading team in Dubai. Tel: +971 4 437 1700. Kim Gade Mob: +971 55 935 5982; Email: [email protected]. Fernando Manuel Tirado Lenador Mob: +971 55 9355 967; Email: [email protected]. Abdur Rahman Mob: +971 55 935 5978 Email: [email protected]. Ajay Menon has been appointed senior bunker and lubricant trader and team leader. Tel: +971 4437 1720; Mob: +971 50 452 1374; Email: [email protected].

Dan-Bunkering has opened Dan-Bunkering (Middle East) DMCC at the Jumeirah Business Centre 3, Plot No. Y1, Office No. 3404, Jumeirah Lakes Towers, P.O. Box 37034, Dubai, United Arab Emirates. The operation is led by Managing Director Kasper Fulton Stiedl. He is joined by four bunker traders from the Middelfart office: Pooja Sangani (Mob: +971 507 268097; Email: [email protected]), Raj Kiran Wuddi (Mob: +971 551 333379; Email: [email protected]), Anders Bønnelykke (Mob: +971 551 333378; Email: [email protected]) and Arjun Sundar (Mob: +45 6018 0715; Email: [email protected]).

Jon Hughes has been appointed as the new managing director of SABT in Cape Town, South Africa, taking over from André Baard. Tel: +27 21 551 9588; Fax: +27 21 551 9574; Email: [email protected].

Asia PacificOW Bunker and Trading India Pvt Ltd has appointed Bilquis Khan as branch manager of its Mumbai office. Tel: +91 6194 5404; Mob: +91 750 608 5895; Email: [email protected].

Kenny Luk has joined Bomin Bunker Oil Ltd in Hong Kong as a bunker trader. Tel: +852 2891 7799; Mob: +852 5365 9638; Email: [email protected].

Dan-Bunkering Ltd has expanded its activities in China with an office in Beijing, A/S Dan-Bunkering Ltd Beijing Representative Office. Tel: +86 10 6590 6607; Fax: +86 10 6590 6881; Email: [email protected]. Contact Dave Zheng, manager (Mob: +86 137 1661 6184; Email: [email protected]). Dena Kong, Marketing Executive (Mob: +86 139 1083 8734; Email: [email protected]).

Koh Kuan Hua has relocated to A/S Dan-Bunkering Ltd’s Singapore office after almost three years in its Shanghai office. Tel: +65 6572 4327; Mob: +65 9108 8851; Email: [email protected].

KPI Bridge Oil has appointed Caroline Huot as its Global Marine Lubricants Director, based in the group’s Singapore office. Tel: +65 6220 8655; Mob: +65 9233 4270; Email: [email protected].

Alan Tan has joined Dynamic Oil Trading in Singapore as Team Leader, Worldwide

Department, with Euwyn Tan, Jaslyn Tan and Swee Ng joining as bunker traders. Alan Tan has worked for seven years in Shanghai for Dan-Bunkering, prior to working for Chemoil in Singapore. Euwyn Tan spent four years working as a shipbroker in Taiwan and joins from Chemoil. Jaslyn Tan previously worked for Chemoil for six years. Swee Ng previously worked with ICAP Singapore Pte Ltd, Ginga Petroleum and Coastal Oil Singapore Pte Ltd. Contact Alan Tan Tel: +65 6437 5513; Mob: +65 9146 2815; Email: [email protected]. Euwyn Tan Tel: +65 6437 5512; Mob: +65 8777 4330; Email: [email protected]. Jaslyn Tan Tel: +65 6437 5511; Mob: +65 9780 3265; Email: [email protected]. Swee Ng. Tel: +65 6437 5514; Mob: +65 985 00579; Email: [email protected].

Eugene Boey and Ivan Cai have joined Singapore bunker trader G-Fuel Pte Ltd as trading executives. Tel: +65 6225 0777; Email: [email protected]. Boey Mob: +65 9271 1229; Cai Mob: +65 8388 7338.

Americas

Felix Yamasato, previously a credit analyst with Lloyd's List Intelligence, has joined Peninsula Petroleum Inc. in Connecticut. Tel: +1 203 252 4068.

KPI Bridge Oil has appointed Rob Atkinson as group vice CEO and Jesper Rasmussen as managing director, KPI Bridge Oil North America. Tel: +1 732 219 7900. Atkinson Mob: +1 732 859 1673; Email: [email protected]. Rasmussen Mob: +1 732 533 3331; Email: [email protected].

Bunkers de Mexico SA de CV (Bunker's Mexico Group) has opened a representative office in Houston. The legal name of the US division is Bunker's Corporation. Jack Grogan is the Commercial Director. Mob: +1 713 480 2849; Email: [email protected].

Johana Pieters-Restrepo has been promoted to a new position within Curoil N.V. in Curaçao, leaving Donald Ogenia (Tel: +599 9432 0515; Email: [email protected]) and Nancy Cleofa (Tel: +599 9432 0517; Email: [email protected]) to handle all bunker enquiries.

Juan Pablo Veas has left Chilean bunker supplier Petroleos Marinos de Chile Ltda (PMC). Mob: +56 9 7539 8852; Email: [email protected]. Guy de Viet has taken over the commercial side of the business. Tel: +56 32 279 6550; Mob: +56 9 7749 1251; Fax: +56 32 279 6233; Email: [email protected].

DUCSA – Distribuidora Uruguaya de Combustibles S.A. is relocating to Juan Benito Blanco 3340, C.P 11.300, Montevideo, Uruguay. Tel: +598 2622 6622.

Argentinean bunker supplier Risler S.A. has appointed Emilce Iglesias as Bunker Manager (Tel: +54 341 424 1234) and Marcela Barragan as Senior Bunker Manager (Tel: +54 11 4393 0723).


INDIA: India Shipping Summit22-24 October, MumbaiContact: Trevor Pereira, SeatradeTel: +971 4 324 5344Email: [email protected]: www.indiashippingsummit.com

INDIA: Southern Asia Ports, Logistics and Shipping 23-24 October, MumbaiContact: Transport Events ManagementTel: +60 87 426 022Fax: +60 87 426 223Email: [email protected]: www.transportevents.com

DENMARK: Future Marine Fuels & Lubes Conference30-31 October, CopenhagenContact: Riviera Maritime Media LtdTel: +44 20 8364 1551 Email: [email protected] Web: www.rivieramm.com

NOVEMBER

SOUTH AFRICA: Intermodal Africa South21-22 November, Port ElizabethContact : Transport Events ManagementTel: +60 87 426 022Fax: +60 87 426 223Email: [email protected]: www.transportevents.com

UNITED ARAB EMIRATES: Turkish Maritime Forum26 November, IstanbulContact: SeatradeTel: +44 1206 545 121Fax: +44 1206 545 190 Web: www.turkishshippingsummit.com

DECEMBER

SINGAPORE: Bunkering in China2-4 December, SingaporeContact: IBC AsiaTel: +65 6508 2401Fax: +65 6508 2407Email: [email protected]: www.ibc-asia.com

CHINA: Marintec China3-6 December, ShanghaiContact: UBM Asia LtdTel: +852 2827 6211Fax: +852 3749 7347Email: [email protected]: www.marintecchina.com

UNITED ARAB EMIRATES: TOC Container Supply Chain: Middle East9-11 December, DubaiContact: TOC EventsTel: +44 20 7017 4394Web: www.tocevents-me.com

UNITED ARAB EMIRATES: MultiModal Middle East9-11 December, DubaiContact: Richard Pavitt, InformaTel: +971 4 407 2606Email: [email protected]: www.multimodal-me.com

Events

Events Diary JUNE

INDONESIA: Indonesia Port Development Summit 201317-20 June, JakartaContact: Siew Tee Teoh, IBC AsiaTel: +65 6508 2458 Email: [email protected]: www.indonesiaportsummit.com

UNITED STATES: Marine Money Week 18-20 June, New York Contact: Marine MoneyTel: +1 203 406 0106Fax: +1 203 406 0110Email: [email protected]: www.marinemoney.com

LNG Fuel for Vessels: Pricing & Trading Seminar 19-20 June, LondonContact: Lloyd's Maritime AcademyTel: +44 207 017 5510Web: www.lloydsmaritimeacademy.com

SINGAPORE: LNG Bunkering24-27 June, SingaporeContact: IBC AsiaTel: +65 6508 2401Fax: +65 6508 2407Email: [email protected]: www.lngbunkeringsg.com

SINGAPORE: Bunkering in Singapore24-27 June, SingaporeContact: IBC AsiaWeb: www.bunkeringinsingapore.com

SINGAPORE: Asia Green Shipping Conference24-27 June, SingaporeContact: IBC AsiaWeb: www.greenshippingasia.com

NETHERLANDS: TOC Container Supply Chain: Europe25-27 June, RotterdamContact: TOC EventsTel: +44 20 7017 4394 Web: www.tocevents-europe.com

JULY

FRANCE: International Association of Maritime Economists Conference3-5 July, MarseilleContact: Euromed ManagementTel: +33 491 827 377Fax: +33 491 827 983Email: [email protected]: www.euromed-management.com

VIETNAM: ASEAN Ports and Shipping11-12 July, Ho Chi Minh CityContact: Transport Events ManagementTel: +60 87 426 022Fax: +60 87 426 223Email: [email protected] Web: www.transportevents.com

AUGUST

BRAZIL: Navalshore: Marintec South America13-15 August, Rio de JaneiroContact: Fábio Godoy, UBMTel: +55 11 4689 1935Web: www.ubmnavalshore.com.br

SEPTEMBER

UNITED KINGDOM: London International Shipping Week9-13 September, LondonContact: Shipping Innovation, a joint venture between Petrospot and ElaborateTel: +44 1295 81 44 55 /+44 1296 682 051Email: [email protected]: www.londoninternationalshippingweek.com

SCANDINAVIA: Gas Fuelled Ships Conference11-12 September, Stockholm - TurkuContact: Mercator MediaTel: +44 1329 825335Fax: +44 1329 825330Email: [email protected]: www.motorship.com/gfsconference

UNITED KINGDOM: The Oxford Bunker Course16-20 September, OxfordContact: The Petrospot Events TeamTel: +44 1295 81 44 55Email: [email protected]: www.petrospot.com/oxford

UNITED STATES: HHP Summit17-19 September, Chicago Contact: Gladstein, Neandross & AssociatesWeb: www.hhpinsight.com

GERMANY: Ship Efficiency23-24 September, Hamburg Contact: Schiffbautechnische Gesellschaft e.V.Tel: +49 40 690 49 10Fax: +49 40 690 03 41Email: [email protected]: www.ship-efficiency.org

UNITED ARAB EMIRATES: Seatrade Middle East Workboats & Marine Offshore30 September - 2 October, Abu DhabiContact: SeatradeTel: +44 1206 545 121 Web: www.middleeastworkboats.com

OCTOBER

UNITED STATES: TOC Container Supply Chain: Americas1-3 October, MiamiContact: TOC EventsTel: +44 20 7017 4394Web: www.tocevents-americas.com

NETHERLANDS: ARACON2-4 October, RotterdamContact: The Petrospot Events TeamTel: +44 1295 81 44 55Email: [email protected]: www.petrospot.com

INDIA: INMEX8-10 October, Mumbai Contact: InformaTel: +91 22 4048 1704Email: [email protected]: www.inmexindia.com

GERMANY: Intermodal Europe8-10 October, HamburgContact: Sophie AhmedTel: +44 207 017 5112Email: [email protected]: www.intermodal-events.com

BELGIUM: GreenPort Congress9-11 October, AntwerpContact: Mercator Media LtdTel: +44 1329 825335Fax: +44 1329 825330Email: [email protected]: www.greenportasia.com

To list details of bunker-related events and conferences, contact:

Tel: +44 1295 814455

Fax: +44 1295 814466


brave new world - bunkerspot€¦ · seagas is the first lng bunkering vessel of its kind, and on a...

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