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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 speci�c information on all aspects of the marine fuels industry. An annual subscription to Bunkerspot (published in February, April, June, August, October and December), including unlimited access to the website www.bunkerspot.com, is UK£250/€280/US$400. ISSN 1741-6981. Copyright Petrospot Limited © 2014. 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

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CYBER STORMHOW SECURE ARE YOUR BUNKER DEALS?

INSIDE:

FUEL TESTING

REGULATORY COMPLIANCE

VESSEL MONITORING

ALTERNATIVE FUELS

www.bunkerspot.com Volume 11 Number 2 April/May 2014

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NEWS Financial outlook ............................................................................................................................... 8

Europe ............................................................................................................................................10

Americas .........................................................................................................................................18

Asia Paci�c ..................................................................................................................................... 25

Africa and Mideast .......................................................................................................................... 29

Features

CybercrimeCyber hackers are targeting the bunker industry – and the �nancial implications can be huge. Steve Simms offers a counter-offensive to this growing threat ........................................................ 30

LNGLNG America is designing a ‘hub and spoke’ architecture for the distribution of LNG to the major US Gulf Coast ports. CEO Keith Meyer explains the company’s vision .................................. 34

Innovative solutions invariably require market ‘pioneers’ to prove their viability. Sam Lowrey spoke to Ed de Jong about Deen Shipping’s commitment to LNG .................................................. 36

Regulations and supply structures governing the use of marine LNG are being implemented. However, as Sam Lowrey discusses, pricing LNG as a fuel is far less clear cut ............................... 40

Alternative FuelsNew research shows that glycerine has clear potential as a niche bunker fuel. Rebecca Byers discovers more .......................................................................................................42

ECA RegulationsMuch work remains to be done on the ‘policing’ of sulphur emissions regulations in Europe

after 2015. Lesley Bankes-Hughes takes a closer look at the problem ............................................ 46

EnvironmentResearchers at the Tyndall Centre believe that the shipping sector has yet to wake up to the problem of CO2 emissions. Rebecca Byers �nds out more ............................................................. 50

Trade FocusThe US Administration is under increasing pressure to lift the ban on US crude oil exports. However, as Melanie Wold explains, this long-standing legislation continues to polarise opinion .....52

FinanceInnovations in exchange platforms have provided the transparency that is required for commodity derivatives to evolve. Chris Thorpe takes a closer look at this dynamic marketplace ....................... 54

Regional Focus: Russian Far EastThe opening up of the North Sea Route will have a major effect on cargo transit schedules. As Rebecca Byers �nds out, RFE suppliers are gearing up for new business opportunities ................. 58

Regional Focus: Latin AmericaPedro Gomez of OW Bunker Latin America explores the region’s changing bunker market and explains why ECA regulations are bolstering the market for LSFO supply at gateway locations....... 62

Fuel IssuesAs the Arctic Ocean opens up to increasing maritime trade, Albert Leyson of Drew Marine urges operators to reassess fuel �ow parameters for distillate fuel oil .............................................. 64

Fuel Cell TechnologyAn innovative fuel cell technology project for the maritime sector is poised to move to the next level, as Mike Janes of Sandia National Laboratories explains. .................................................67

Vessel MonitoringPeter Mantel of BMT SMART discusses how performance monitoring systems can be effective drivers towards vessel ef�ciency ......................................................................................................70

Scupper PlugMark Bell, General Manager of the Society for Gas as a Marine Fuel, outlines the key points on the agenda of its newly-formed technical committee ...................................................................72

Event focus ......................................................................................................................................74

Networking ..................................................................................................................................... 76

Bunkerspotted ................................................................................................................................ 77

Conference Diary .............................................................................................................................78

page 30

page 42

page 64

Steve Simms shows how cybercrime is impacting the bunkering industry – with huge financial implications

Rebecca Byers investigates glycerine’s potential as a niche bunker fuel

Albert Leyson flags up some key distillate fuel flow parameters for vessels on Arctic Ocean transits

bunkerspotted...on page 77

contents



LNGLNGLNGBUNKER FUELBUNKER FUELBUNKER FUEL

AVAILABLEAVAILABLEAVAILABLEU.S. GULF COASTU.S. GULF COASTU.S. GULF COAST

201520152015LNG where needed, when needed,

and in the quantity neededHow: Ship-to-ship, shore-to-ship bunkering operationsClean: Meets IMO and ECA emissions requirementsReliable: Delivery, storage, production, and supplyFlexible: Short or long-term contractingCompetitive: Attractive pricingWhere: U.S. Gulf CoastWhen: Late 2015

Call: 281.448.1114Visit: www.LNGAmerica.com

Email: [email protected]

H H H H H

H H H H H

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T he maritime industry is ‘under excessive pressure’ to comply with upcoming environmental

regulations. In the run up to 1 January 2015, this seems to have become the default position for so many shipowners/operators, charterers, and bunker suppliers.

To achieve any consensus on drawing up regulations takes years of discussion, renegotiation and redrafting. While agreement on the sulphur Directive brought to an end one process, it also marked the beginning of what is a tortuous and protracted journey towards implementation and compliance.

Unfortunately, the setting of compliance deadlines does not always result in an immediate clarion call to action amongst those who are tasked with meeting those end dates. As we all know, deadlines can provoke a range of responses, including inertia, prevarication and a self-induced myopia. For the maritime sector, the 2015 sulphur emissions deadline is a stark case in point. For too long the industry has perhaps buried its collective head in the sand about this. As one shipowner noted recently: ‘If we all have the same problem, then we don’t have a problem.’ There’s a lot of truth in this, and as deadlines inexorably approach, it usually takes a few proactive ‘pioneers’ to lead the way in �nding the solutions required to comply with regulations. In the case of 2015, it has required collaboration between technology providers, shipowners and bunker suppliers to achieve what really is a fundamental change in the way the shipping industry will have to think about its fuel choices in the future.

While the momentum for compliance has eventually grown within the industry, there perhaps has not been the expected corresponding action on the part of the regulators in determining how compliance will be effectively monitored or ‘policed’ – particularly in the case of the Baltic and North Sea emission control areas (ECAs). In this issue of Bunkerspot, we look at this contentious issue and find

out how some member states are taking steps to address this perceived problem.

The pros and cons of a switch to lique�ed natural gas (LNG) also come under scrutiny. Keith Meyer, CEO of LNG America, explains how his company is developing a ‘hub and spoke’ infrastructure to facilitate the supply of LNG to US Gulf Coast ports. Sam Lowrey talks to Ed de Jong at Deen Shipping about its decision to embrace the LNG option, and he also sets out to clarify some of the issues – and misunderstandings – surrounding the pricing of LNG as a marine fuel.

Rebecca Byers investigates another ‘alternative’ fuel option, glycerine, and looks at its future potential as a niche bunker fuel. She also interviews researchers at the respected Tyndall Centre about its plans for a conference in June in Liverpool (see page 50) which will focus on maritime carbon dioxide (CO2) emissions – a problem which they think is still signi�cantly underestimated by the shipping industry.

In this issue we also catch up with the research team at Sandia National Laboratories in the United States, now that its ground-breaking work on the use of fuel cell technology to provide alternative electricity supply within the port environment moves on to its next phase of development at the Port of Honolulu. Staying stateside, Melanie Wold �nds that there is still a very vocal clash of opinion over any potential lifting of the US ban on crude oil exports, while Chris Thorpe explains that the evolution of commodity derivative exchanges has done much to facilitate the provision of market information for traders.

The opening up of the Arctic Route will change the trading landscape for the shipping industry, and will have speci�c rami�cations for the bunker sector. Albert Leyson of Drew Marine highlights some of the fuel issues that can arise in this low temperature environment and suggests that fuel �ow parameters should be revisited.

The recent successful attempt by hackers to in�ltrate and manipulate manifest

information held electronically at the Port of Antwerp did much to make the maritime sector wake up to the cybersecurity threat. As Steve Simms of Simms Showers points out, however, this threat is present much closer to home. His timely and sobering insights into how hackers are increasingly targeting the electronic information exchanges within the bunker industry – with sometimes devastating �nancial consequences – should certainly give the sector food for thought.

The 2015 emissions deadline will soon come and go and, as one member of the shipowning community recently noted, with perhaps a degree of cynicism, ‘many lessons have been learned for the next time’. That ‘next time’ will be the deadline for the implementation of a global sulphur emissions cap, and the jury is still out on whether this will be in 2020 or 2025.

While the International Maritime Organi-zation (IMO) continues with its deliberations, for the marine fuels sector there is no turning back – the old certainties over the global fuel mix have gone forever. A new report, compiled by Lloyd’s Register and the University College London Energy Institute, on global marine fuel trends out to 2030 makes for interesting reading. Taking its ‘status quo’ model, LNG could hold an 11% share of the bunker market by 2030 (given that fuel demand is expected to double). While demand for heavy fuel oil may fall away in coming years, the report does suggest that it could still account for almost half of the fuel market in 2030 – perhaps a greater share than some other commentators have predicted.

Looking at LNG, its predicted 11% is not an insigni�cant market share, but the ‘traditional’ bunker players seem to be demonstrating a curious reticence about this issue. They can either engage in the provision of marine LNG or they can take a back seat – either way, a ‘wait and see’ attitude, in terms of their client relationships, is not going to be a supportable standpoint for very much longer.

Lesley Bankes-Hughes, Editor

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The Financial Overview in the February/March issue of Bunkerspot focused on how the shipping sector could

secure inward investment given that the banking sector continues to remain on the lending sidelines. Initial public offerings (IPO) were �agged up as an attractive fund-raising option – investor appetite seems to be whetted for this type of opportunity at the moment, particularly for larger deals.

At the beginning of March, to nobody in the marine fuel sector’s surprise (it was always going to be ‘when’ rather than ‘if’), OW Bunker took the plunge and announced its intention to go down the IPO route. Jim Pedersen,

OW Bunker’s CEO, was in predictably buoyant mood about the proposed listing on the Copenhagen exchange, noting that: ‘Over the years, we have invested in and built a robust and scalable business model, which during the last three years has yielded an average return on equity of over 25%. In 2013, we delivered growth rates above 30% in our key performance indicators: volume, gross pro�t and pro�t before tax’.

While the proceeds of the IPO will go towards funding OW Bunker’s growth strategy, it is also useful, given the current market ‘chatter’ about private equity investment in the shipping sector, to see this listing as a

(partial) exit strategy for the company’s current largest shareholder, private equity group, Altor, which acquired OW Bunker in 2007.

In the wider shipping sector, as Bunkerspot went to press Ardmore Shipping announced a follow on share offering of just over 8 million shares (including an over-allotment option) priced at $13.50 a share. The proceeds will be used to fund the company’s ambitious �eet expansion strategy. Tracking back from this offering, Ardmore raised funds last year through its listing on the New York Stock Exchange – again, this move provided an exit strategy for another private equity investor, Greenbriar Equity Fund.

Financial outlook

12 month rolling price charts380 CST Fuel Oil

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financial outlook

8 www.bunkerspot.com Bunkerspot April/May 2014


380 IFOJanuary February March

20-25 27-31 03-07 10-14 17-21 24-28 03-07 10-14 17-21

Rotterdam d 611 565 574 581 585 587 585 577 577

Gibraltar d 600 599 604 604 606 608 606 598 598

Piraeus d 602 599 610 608 610 614 609 600 601

Suez d 670 671 671 673 677 691 693 691 687

Fujairah d 617 613 612 608 611 604 617 599 603

Durban w n/a 658 n/a n/a n/a n/a n/a n/a 611

Tokyo d 665 668 668 656 652 656 656 658 659

Busan d 642 657 649 647 647 633 632 625 623

Hong Kong d 628 627 629 626 627 618 615 610 606

Singapore d 612 615 621 613 616 615 608 601 597

Los Angeles w 648 637 620 598 630 631 632 603 623

Houston w 590 592 591 597 601 605 605 591 586

New York w 598 605 613 625 632 632 626 613 610

Panama w 600 598 605 615 620 628 624 620 619

Santos d 611 600 602 613 620 638 647 656 628

Buenos Aires d 608 608 595 589 588 581 585 581 591

180 IFOJanuary February March

20-25 27-31 03-07 10-14 17-21 24-28 03-07 10-14 17-21

Rotterdam d 530 612 601 608 608 612 607 604 602

Gibraltar d 630 631 636 635 637 641 636 629 635

Piraeus d 633 632 640 638 641 644 634 633 636

Suez d 690 681 676 683 688 738 727 762 757

Fujairah d 654 646 646 644 644 640 651 639 641

Durban w 619 619 619 619 619 621 615 611 612

Tokyo d 669 652 652 665 664 677 673 661 665

Busan d 666 690 679 674 670 654 652 645 643

Hong Kong d 632 637 639 638 636 624 622 619 616

Singapore d 636 632 633 631 630 629 622 616 621

Los Angeles w 690 697 677 636 670 668 671 627 649

Houston w 647 670 665 641 670 731 670 661 654

New York w 648 655 668 670 684 686 683 667 629

Panama w 655 668 677 682 682 680 743 680 676

Santos d 628 566 624 634 641 720 669 678 653

Buenos Aires d 667 655 655 652 686 670 670 671 684

MDOJanuary February March

20-25 27-31 03-07 10-14 17-21 24-28 03-07 10-14 17-21

Rotterdam d 877 890 891 894 895 891 890 879 863

Gibraltar d 894 960 960 958 963 967 959 944 940

Piraeus d 879 947 947 941 946 948 948 930 920

Suez d 997 1066 1071 1070 1066 1071 1077 1071 1076

Fujairah d 932 996 996 994 988 997 997 982 983

Durban w 1048 1050 1048 1051 1061 1044 1047 1044 1041

Tokyo d 887 677 677 927 941 1028 955 973 969

Busan d 883 950 940 937 943 938 938 930 932

Hong Kong d 869 935 812 930 933 924 924 919 868

Singapore d 863 916 932 917 929 937 931 919 908

Los Angeles w 894 985 995 915 975 974 981 957 954

Houston w 909 1020 1034 999 1011 1020 1017 996 992

New York w 911 1015 1054 1060 1072 1064 1071 1062 1046

Panama w 965 1040 1046 1052 1055 1053 1052 1050 1054

Santos d 935 622 1015 1015 1014 1014 1014 997 985

Buenos Aires d 1002 716 716 1093 1138 1138 1140 1152 1140

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

In late February, French cryogenic membrane containment system company, GTT, committed to an IPO of 41.8% of its capital which would value it at some €1.7 billion ($2.34 billion). Its original shareholders, which continue to hold a stake in GTT, are French utility GDF Suez, Total SA – and US private equity fund Hellman & Friedman (which has reduced its interest in the company to 8.8%).

In a recent major transport survey undertaken by law �rm Norton Rose Fulbright, The Way Ahead, opinions were sought from participants across the shipping, rail and aviation sectors. Some 69% of the shipping respondents said that current market conditions were positive for the sector. When asked what the most significant changes in the shipping industry would be, 24% said that larger participants would be more dominant, 23% suggested increased joint venture, alliance and pooling activity, while 22% cited new funding sources.

Some 36% of shipping respondents, however, cited a supply and demand imbalance (overcapacity) as the greatest challenge to the future ef�ciency of operations in the sector.

Set this against a currently unfunded order book of some $115 billion, however, and the current investment ‘noise’ may become a little more muted. At a recent Marine Money Gulf Ship Finance Conference, Ronan Nash of Tufton Oceanic gave a useful breakdown of how this shortfall could be funded. The bond market, public equity, and bank debt could absorb a signi�cant amount and Nash estimated that private equity could perhaps step in to take on $20 billion of funding.

The fact remains that the shipping sector may see considerable fund raising activity in 2014 through a combination of �nancing solutions. Beyond the board rooms of the money makers and lenders, however, the shipping industry is still in an uncomfortable place. Set the currently unfunded order book against continuing over-capacity and a growing new order book – and things just don’t quite add up.

As a postscript, while the IPO route looks to set to gain more travellers this year, it is perhaps worth mentioning Chemoil and its intention to delist from the Singapore stock exchange following its acquisition by Glencore Xstrata. Under the leadership of the late Robert Chandran, Chemoil’s decision to seek a listing in 2007 was seen as an innovative strategy for the bunker sector. Few would have predicted a delisting would be on the cards for this particular bunker player a few years down the line – which just goes to show there is nothing so certain as unpredictability.

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 Bunkering, and KPI Bridge Oil. Bunkerspot welcomes market reports from other sources for inclusion on its website www.bunkerspot.com

financial outlook




news in briefSPAIN ____________________Keeping trimABB has won an order from Spanish ferry operator Baleària to supply energy management systems for one of the company’s vessels.ABB’s EMMA Advisory suite will be installed onboard the Martin i Soler and will act as a decision support tool aimed at minimising the overall energy costs for individual vessels and entire �eets.The technology will look at optimising dynamic trim as well as monitoring hull condition to ensure that the vessel will run as ef�ciently as possible. These features will be coupled with the ability to optimise required propulsive power and forecast hull and propeller fouling.Baleària’s Fleet Manager, Guillermo Alomar, said: ‘Baleària and ABB are expecting over 2% savings in propulsion power used at sea through the installation of the trim optimisation system and hull monitoring, which will have the same impact on the fuel consumption and consequently reduce emissions.’

CHANNEL ISLANDS ________Fuel studyThe Channel Islands Competition and Regulatory Authorities (CICRA) has announced it intends to conduct market studies into the supply of marine fuel.The work programme for 2014 outlined CICRA’s intentions to fully investigate the projects in the areas of competition law and utility regulation, which will include the supply of fuel to the islands’ harbours.The organisation also expected to become responsible for the economic regulation of air and sea ports in Jersey by 2015.

EUROPE __________________Fuel ef�cient charter dealStar Bulk Carriers Corp. has entered into agreements with CSSC (Hong Kong) Shipping Co. Ltd to bareboat charter two fuel-ef�cient dry bulk vessels.The two Newcastlemax vessels each have a cargo carrying capacity of 208,000 deadweight tonnes (DWT) and will be chartered on a 10-year term at a monthly cost between $371,000 and $410,000.Under the terms of the charter, Star Bulk is also required to pay $23.1 million (20% of construction costs) to CSSC.

ESPO gives its backing to LNG bunkering infrastructureEUROPE __________________________________________________

The European Sea Ports Organisation (ESPO) has voiced its support for a lique�ed natural gas (LNG) bunkering infrastructure in core European ports ahead of a European Parliament and Council meeting on a Clean Fuel Strategy.

If an agreement can be reached on the strategy, it could be endorsed by the Parliament before the upcoming European elections.

ESPO’s Secretary-General Isabelle Ryckbost emphasised that: ‘This strategy is important because it sets out a plan for Member States and stakeholders to work towards alternative fuels. We hope that this strategy is �nalised soon, in view of giving the different stakeholders a clear sign on where to go and allowing them to start or continue working towards that goal.

‘We therefore urge the Parliament and the Council to do everything possible to reach a �rst reading agreement.’

Two key areas up for discussion are the deadline for the provision of LNG refuelling ports in core network ports and the conditions under which onshore electricity will be offered in ports.

In a statement, ESPO said that, with regard to the establishment of LNG refuelling points in core TEN-T ports, ‘the aim here should be the deployment of a suf�cient network of LNG refuelling points taking market realities and distances between ports into account.

‘ESPO agrees with the Parliament that it makes sense for such an LNG refuelling network to be deployed by 2020 in consistency with the

entering into force of the sulphur Directive. It is of upmost importance though that the relevant co-funding possibilities for LNG projects are ensured also after the 2014-2020 period.’

ESPO, however, acknowledged that a compromise on the issue of onshore power may be the way ahead. It said that it will consider ‘a compromise obliging core TEN-T ports to provide shore-side electricity wherever there is demand, the costs are not disproportionate to the bene�ts and there is signi�cant positive impact on the environment, as acceptable for both institutions.

‘The deadline for meeting this obligation is of a lesser importance to ESPO. If, as a result of an assessment, it seems that shore-side electricity is the most viable solution for the whole or a part of the port, ports should not wait until 2020 or 2025.’

Isabelle Ryckbost concluded: ‘The aim of this strategy should be to push ports to re�ect as soon as possible on their way to enhance the use of cleaner fuels. Shore-side electricity is certainly one of the pillars of such a strategy and re�ection. If cost-effective and wherever it comes out as the best environmental solution, it should be installed.

‘But we should not see this technology in isolation. For berths where only LNG-fuelled ships are arriving, such a technology is completely redundant. It is also clear that technologies in the �eld are evolving constantly. We should give ports the possibility to adapt to and invest in those as well.’

OW Bunker double hulls bunker bargeTURKEY __________________________________________________

OW Bunker has double-hulled one of its bunker barges, ensuring compliance with upcoming 2016 regulations from the Turkish Ministry of Transportation.

The regulations seek to bring Turkey’s bunker �eet into line with existing International Maritime Organization (IMO) and European Union (EU) regulations requiring all bunker barges above 600 deadweight tonnes (DWT) to be double-hulled.

OW Bunker says that the 1,150 DWT bunker barge Feyzanur has now undergone modi�cations to this effect.

TBS Denizcilik A.S. (TBS), which is the wholly-owned subsidiary of OW Bunker, has also announced that the 800 DWT vessel, M/T

Boreas-T, has been �tted with a double hull as well.

The company has further revealed that TBS’s double-hulled 1,250 DWT Ares-T has undergone a comprehensive survey in dry dock to assess and improve its performance and operational ef�ciency.

Sibel Buyuk, who is the General Manager of TBS Denizcilik AS, commented: ‘While regulations mandating the conversion to double-hulled barges are not due until 2016, the improvements made to our vessels in dry dock are an important part of an overall strategic programme to ensure that we have the most ef�cient and cost effective physical distribution operation in the region.’

news europe



news in briefEUROPE __________________Order book boostMAN Diesel & Turbo is to supply eight diesel-electric propulsion systems for two new cruise ships.The company is to supply Fincanteri Navali Italiani S.p.A with eight dual-fuel engines for cruise vessels being built for Viking Ocean Cruises.The propulsion system will work alongside an Alfa Laval exhaust gas cleaning system, which will be used to remove sulphur oxide (SOx).The company has also been commissioned to supply �ve large-bore diesel engines for a diesel-electric propulsion system onboard the next generation of Carnival Cruise Lines vessels. This order will also be completed at the Fincantieri Shipyard.

Vessel upgradeThe European Maritime Safety Agency (EMSA) has announced that its contracted vessel, Enterprise, has been �tted with a new ‘Weir Boom 180’ system.The boom features a combined containment and recovery system and was designed for response operations after large oil spills, as well as ‘blow-outs’.The system is equipped with a fully autonomous source of hydraulic power and it can be packed for quick mobilisation.

ESTONIA _________________Fuel prices cushion pro�ts fallAn Estonian operator has revealed that it has bene�tted from a drop in bunker fuel prices, but that a ‘weak macroeconomic environment’ has seen pro�ts fall.AS Tallink Grupp and its subsidiaries posted an unaudited net pro�t of €43.3 million ($59.55 million) – which is a 23.1% decrease compared with the results of the previous year. Despite the loss, the company was helped by the climate of lower fuel prices, with the group’s overall fuel costs around 10% lower compared with the same period last year.Despite this decrease, the company said that it was mainly affected by ‘an overall weak macroeconomic environment in the region.’It also noted that: ‘The Nordic countries, which are the group’s main markets, continue to experience noticeable slowdown in their economies.’

ECSA slates delays in Europe’s developing LNG frameworkEUROPE __________________________________________________

Recent discussions by the European Commission, the European Parliament and Member States have dashed shipowners’ hopes of the imminent creation of a lique�ed natural gas (LNG) infrastructure, according to the European Community Shipowners’ Association (ECSA).

ECSA Secretary General, Patrick Verhoeven, commented: ‘While the 2015 deadline for the compliance with the requirements of the European Union (EU) Sulphur Directive is fast approaching and with time running out, it was our hope that the EU would break the LNG ‘chicken and egg’ dilemma by deciding that major European ports will need to have LNG refuelling points in place by latest 2020 so as to coincide with the 0.5% limit in sulphur content of bunker fuels in EU waters.’

The 2020 vision has however not occurred, with an agreement in place requiring only that a ‘suf�cient number’ of big European ports should develop LNG refuelling infrastructure for maritime transport by 2025.

The ‘chicken and egg’ dilemma, which Mr Verhoeven pointed to, relates to ports unwilling to invest in LNG bunkering stations if the demand is not there, while shipowners are not willing to invest in vessels if they have nowhere to refuel.

It is this problem which the ECSA believes the EU could have solved, by making the availability of LNG for maritime refuelling at European ports mandatory.

Verhoeven expressed his opinion on the agreement by adding: ‘Our disappointment is all the greater not only because the 2025 deadline, as agreed between the Commission, the Council and the European Parliament, will only come �ve years after the 2020 deadline by which time shipowners across the EU will have to switch to compliant fuel, but also because this particular Directive seemed to be the only remaining �eld in which the EU could effectively lend a helping hand to the shipping industry in its efforts to meet the sulphur requirements both inside and outside Sulphur Emission Control Area (SECA).’

Aegean’s fuel sales dip in Q4 2013EUROPE __________________________________________________

Aegean Marine Petroleum Network Inc.’s (Aegean) results for the fourth quarter of 2013 showed a drop of 15.7% in marine fuel sales compared with the same period in 2012.

Marine fuel sales dropped to $1.45 billion for the fourth quarter of 2013, compared with last year’s $1.72 billion. A decrease was also reported in total revenues, with Q4 decreasing by 15.2% to $1.47 billion, compared with $1.73 billion in the previous year.

In the quarter ending 31 December 2013, the company sold a total 2,384,376 metric tonnes (mt) of marine fuel, a 12.6% decrease compared with the previous year. Despite this, operating income totalled $14.5 million, up from $11.3 million in the same period in 2012.

In total, 2013 saw the company record gross pro�ts of $286 million with an operating income of $48.8 million. The �nal quarter of 2013 saw Aegean hit the acquisition trail with its purchase of Hess Corporations’ US East Coast bunkering business unit for $30 million, before launching Aegean US East Coast Operations.

E. Nikolas Tavlarios, President of Aegean, said: ‘We closed 2013 with great momentum

and the fourth quarter marked our third consecutive full year of pro�tability.

‘Despite persisting market headwinds, we executed on our strategy and once again demonstrated the strength of our business model and our ability to drive compelling returns in a challenging environment. By leveraging our �exible infrastructure, we successfully drove pro�table top-line growth and opportunistically captured additional voyage and storage revenues. At the same time, we monetised non-core vessels, which will allow Aegean to further drive pro�tability by increasing our �eet utilisation over time, reducing our capital expenditures and stream-lining our expense run-rate.’

‘We have built a steady track record of growth and we believe that the continued execution of our core initiatives will enhance shareholder value. We continue to build signi�cant and sustainable internal growth drivers, including our new Aegean US East Coast business and our soon-to-be launched Fujairah storage facility, which we believe will allow Aegean to continue to succeed should market headwinds persist.’

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news in briefFRANCE __________________Endofa-VP ventureBunker supplier and trader Endofa has announced its partnership with broker VP Bunkers, to form Endofa-VP.The new company will work to expand Endofa’s European presence whilst serving as its exclusive agent in France. Its of�ces will be located in Nice.The partnership comes after both Endofa and VP Bunkers experienced ‘signi�cant momentum’ in their �rst year of operation.Endofa’s Kenn Soendergaard said: ‘Our promise to deliver positive energy to the shipping market and offshore industry is very much at the centre of this new venture.‘Our European activity climbed consistently throughout 2013. This is a win-win for both entities and our customers/suppliers as we work to expand Endofa-VP.’

GREECE __________________Piraeus LNG stationThe Port of Piraeus is set to develop a lique�ed natural gas (LNG) bunkering station.According to local news reports, the Greek Minister of Marine, Miltiadis Varvitsiotis, has said that whilst currently LNG has ‘limited use’, it is expected that the fuel has great potential due to ‘its minor cost compared to diesel and its signi�cant reduction of greenhouse gases’.The Minister also indicated that 2014 would see a passenger vessel propelled by LNG incorporated into the Greek �eet.

DENMARK ________________OW Bunker IPOAs Bunkerspot went to press, it was reported that the initial public offering (IPO) by OW Bunker had been fully subscribed through a price range DKK120-150 ($22.16-$27.70) per share.Industry observers indicated that interest in the offering had been shown by retail and institutional investors.OW Bunker, which had earlier expressed its intention to complete the offering and listing on the Copenhagen stock exchange by 2 April, is looking to raise some $20.5 million.In an initial release, the company had said that it intended to sell new stock, as well as shares owned by its majority stakeholder, Altor. OW Bunker had said the free �oat would be 40%-60%, depending on the �nal number of shares sold.

BV will oversee Brittany Ferries’ LNG-fuelled fleet expansionFRANCE __________________________________________________

Bureau Veritas (BV) will oversee the conversion of three Brittany Ferries’ vessels to run on lique�ed natural gas (LNG).

The ro-pax ferries will be converted to gas propulsion under the supervision of the classi�cation society. In addition, Bureau Veritas has disclosed that it will be classing a new gas-fuelled ro-ro passenger ferry, which is to be built at STX France for the French ferry company. The new vessel will feature GTT membrane technology for the gas containment.

With a capacity for almost 2,500 passengers and 800 cars, this newbuilding will be one of the largest LNG-powered ro-paxes to date.

Bureau Veritas says that the decision

process for Brittany Ferries to switch part of its �eet to LNG was in�uenced by a major risk analysis that it carried out for the company along with Tecnitas.

Jean Jacques Juenet, passenger ship manager at Bureau Veritas, commented:‘We are proud to be deeply involved in this major project, not only by performing the required risk analysis for the ships but also together with Brittany Ferries working with the ports they serve on the logistics and bunkering.’

Juenet continued: ‘With a clear picture of the economics and safety issues, and certainty about the fuel supply, Brittany Ferries was able to take the crucial decision to adapt to new emission rules by making a full switch to gas power.’

RINA to inspect LNG-fuelled shipsDENMARK ________________________________________________

Classi�cation society RINA has been authorised to carry out plan approval and surveillance during construction onboard ships using lique�ed natural gas (LNG) as a marine fuel.

The Danish Maritime Authority gave its approval for RINA to act on its behalf with respect to ships �ying the Danish �ag.

Andrea Cogliolo, Head of Innovation, RINA Services, said: ‘This authorisation recognises RINA’s expertise with gas and will allow us to assist owners in Denmark who are actively considering conversions to and newbuildings with LNG fuel.

‘We believe there will be a rapid and accelerating switch to LNG as a fuel in north European waters, but the move to gas must be done safely and with good management of all the risks involved. That is where we can make

a real difference, by helping owners and yards to adopt new fuel solutions in a safe and timely manner.’

RINA already has rules and requirements in place for those using LNG onboard ships, which provide the industry with a regulatory tool to ensure that the installation of machinery using LNG is done so with a high level of integrity, from the point of view of safety and reliability.

Andrea Coglioli then stressed that until a new International Marine Organization (IMO) Code for Gas Fuelled Ships is completed, shipowners and yards need to comply with current class requirements.

Coglioli concluded: ‘We are helping owners move to gas, and we are making sure they avoid the pitfalls as well gaining the bene�ts.’

Eco order for NewLead HoldingsEUROPE __________________________________________________

Two ‘eco’ handysize bulk carriers will be delivered to NewLead Holdings later this year after the company announced a $37 million agreement.

The 31,800 deadweight tonne (DWT) vessels will boost NewLead’s existing �eet, which currently includes �ve dry-bulk vessels.

The 2012-built vessels are expected to be �nanced through a recent referred share issue and 75% debt �nancing.

Michael Zolotas, President and Chief Executive Of�cer of NewLead, stated: ‘We are pleased to bring into NewLead two more eco-type dry bulk Handysize vessels at a competitive price with a upside in market value, a 23 year employment lifetime, unlimited trading �exibility and projected EBITDA and operating expenditure of $4.0 million and $1.73 million, respectively, per year per vessel as per current market levels.’

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www.rosneftmarine.com

http://www.rosneftmarine.com

news in briefEUROPE __________________Mediterranean fundingFuture lique�ed natural gas (LNG) supply for vessels on the Spanish Mediterranean coast has been given a boost with the announcement of €1 million ($1.38 million) of funding from the European Union’s TEN-T Programme.The money will help to co-�nance studies on project feasibility, as well as investigate how best to overcome existing barriers in developing an LNG bunkering supply chain in the region.The studies will also investigate the transition of both maritime �eets and port facilities, with the aim of reducing the time-to-market of the LNG bunkering service in the region.The technical, operational, economical and legal aspects of bunkering using LNG will also be analysed, before the evaluation and design of an optimised LNG supply chain in Spanish ports of the Mediterranean is undertaken.

Cost cutting measuresA new energy monitoring tool has been launched which could generate signi�cant fuel savings for modern cruise ships.Classi�cation society RINA’s new InfoSHIP EM is a tool for monitoring and optimising the hotel power demand on cruise ships that is expected to produce hotel load energy savings of more than 10%. RINA says that the load energy savings generated will create considerable annual cash savings in fuel costs for a typical large modern cruise ship.InfoSHIP EM works in real time to collect live power consumption data from the hotel services, AC systems, accommodation and lighting systems, and galley and laundry services. The target values are set by calculation at the design or installation stage and then continuously updated by operational feedback and trend analysis. The values are then optimised according to the season and area of operation, the operational mode, either in port or at sea and the time of day.The tool monitors all the energy users in the hotel services and compares actual use with target values, and it is then able to alert the ship’s staff to higher than target energy use to enable them to take remedial measures.

Port of Antwerp defines LNG guidelinesBELGIUM _________________________________________________

The Port of Antwerp has published its procedures for lique�ed natural gas (LNG) bunkering.

The port’s new Municipal Police Regulations and Port Guidelines came into effect on 9 March, and for the �rst time the regulations include speci�c guidelines for LNG bunkering.

Norwegian classi�cation society DNV has developed the procedures to serve as operational standards for safe LNG bunkering, and it has also investigated the possible risks of parallel LNG bunkering operations in the port.

The procedures developed by DNV for the Port of Antwerp were presented to around 50 stakeholders, both within the port and interna-tionally, and their feedback was taken into

account in �nalising the procedures. ‘Since the technology for LNG bunkering

is still in its early days we expect to build up new know-how during the implementation stage, and the procedures will be re�ned and updated on an ongoing basis,’ explained Eddy Bruyninckx, CEO of Antwerp Port Authority.

The forms in the police regulations for handling LNG will also be regularly updated to keep them in line with LNG bunkering developments.

After a European call for tenders in 2013, Antwerp Port Authority appointed Exmar as its strategic partner with which it will collaborate over the preliminary studies and construction of an LNG bunkering vessel.

ABB secures Color Line ship-to-shore power contractEUROPE __________________________________________________

Power and energy solution supplier ABB has been awarded a contract to supply a complete ship-to-shore (S2S) power system to a Color Line ferry.

Using the system, ro-pax ferry, SuperSpeed1, will be able to switch to shore power. It is expected that the process will result in reductions of up to 3,000 tonnes of carbon dioxide (CO2) and 50 tonnes of nitrogen oxide (NOx) per year, as well as several tonnes’ worth of reductions in particle and sulphur oxide (SOx) emissions.

The scope of the supply comprises

compatibility assessment, installation of the S2S connection switchboard, the onboard transformer, the low voltage receiving switchboard and the extension of the automation system.

It also covers the shore-side high voltage shore connection switchboard in Kristiansand, Norway, where the 11 kV system will supply the existing low voltage 690 V system while the ferry is in port.

The Superspeed1 is the third vessel from Color Line’s �eet to be equipped with ABB’s system.

Port of Gothenburg hails success of clean shipping achievementsSWEDEN __________________________________________________

More than 120 tonnes of sulphur emissions were saved in 2013 as a result of a cleaner shipping campaign at the Port of Gothenberg.

Some 49 vessels took part in the programme, switching to marine gas oil (MGO), or lique�ed natural gas (LNG) whilst operating in the port.

Shipping companies were offered a reward of up to SEK 250,000 ($38,853) per vessel for each year that they took part in the campaign. In total, SEK 4 million ($ 621,648) was paid out during the year.

At 120 tonnes, the amount of sulphur emissions saved was 13 tonnes more than the

previous year.The goal of the programme is to reduce

emissions from shipping in Gothenburg and to facilitate preparations in the lead-up to 2015’s EU Sulphur Directive. It is funded through the port charge, which for many years has required a payment of a surcharge if a ship’s fuel sulphur content exceeds 0.5%.

The Port of Gothenburg is also co-funding a study at Chalmers University of Technology to monitor vessels entering or leaving the port.

By analysing �ue gas plumes, the Port of Gothenburg can measure the level of sulphur in the fuel.

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news in briefFRANCE __________________GTT goes for IPOIn February, Gaz Transport & Technigaz (GTT) launched its initial public offering (IPO) at €46 ($63) per share – valuing the company at €1.7 billion ($2.3 billion).After the IPO, GDF holds around 40% of GTT’s capital, with Total & Hellman & Friedman’s stakes cut to 8.8% each.With 13.5 million shares offered, the company CEO, Philippe Berterottiére, said that ‘the IPO will bring GTT further impetus to consolidate our position as a world leader in key sectors of LNG shipping and to pursue our growth strategy through our development in adjacent sectors.’

RUSSIA ___________________Bunker �eet expansionNayada LLC has expanded its bunkering �eet with the addition of the tanker Zaliv Vostok.The 4,400 deadweight tonne (DWT) tanker was built in 2002 and is able to simulta-neously store three types of oil products. Its pumping rate is 1,000 cubic metres (m³)/hour and its jet-type manoeuvring enables the vessel to dock in adverse weather conditions without the assistance of tugboats.

Lubes supplyLukoil Marine Lubricants has commenced the bulk supply of main grade lubricants at the Port of Novorossiysk.The company delivered its �rst large order of Navigo 70 MCL by barge in January. Until recently, lubricant supplies were not available in bulk at Novorossiysk, meaning that vessels carrying out bunkering at the port had to call elsewhere for lubricant supply.

New bunker tankerA new bunker tanker has started operations at the Port of St Petersburg.The Neftechim-Bunker CJSC-owned double-hulled tanker, Freya, is capable of carrying up to 2,500 tonnes of oil products.Neftechim-Bunker commented on the new vessel: ‘With the acquisition of the tanker Freya we are now in a position not only to increase bunkering volumes in the Port of St Petersburg, but also to enter international waters, offering our bunkering services in extraterrestrial waters and even making product export shipments to the ports of Western Europe.’

BV inks CFD deal with HydrOceanEUROPE __________________________________________________

Bureau Veritas (BV) has entered into a technical and commercial cooperation agreement with French hydrodynamic specialist HydrOcean.

The deal will see HydrOcean supply BV with its Computational Fluid Dynamics (CFD) services, and BV will market HydrOcean’s expertise on a global scale.

The technology supplied to BV has the ability to cost-effectively evaluate and optimise the performance of a vessel’s hull, as well as its appendages, propellers and offshore and marine energy units.

Jean-Francois Segretain, Technical Director, Bureau Veritas, said: ‘HydrOcean’s

CFD services save massive amounts of time for ship, offshore structure and marine energy systems designers. For example, hull forms can be optimised by evaluating hundreds of designs over a wide range of load conditions in only a few weeks, and produce ship fuel consumption savings up to 10% or 15%.

‘Working with HydrOcean’s powerful tools, we are no longer limited to a small number of load conditions when optimising hull forms. New vessels can now be optimised for a complete operational pro�le, which means genuine energy-saving over the entire working cycle of a vessel.’

Titan LNG and Rolande LNG forge supply partnershipEUROPE __________________________________________________

Titan LNG has announced the signing of a strategic partnership with Rolande LNG for the sourcing and transportation of lique�ed natural gas (LNG) to industrial customers.

The deal is primarily aimed at LNG truck �lling stations; however Titan LNG’s Operations Director, Ronald van Selm, told Bunkerspot that the agreement will also see his company supply the fuel for shipping companies.

‘We’re currently talking with shipping companies about the prospect of supplying LNG for their vessels which have recently been converted to utilise LNG as a marine fuel,’ van Selm added.

Rolande LNG’s owner, Fred Schouten,

said: ‘Rolande LNG will jointly source and transport LNG with Titan in our �ve dedicated LNG tank containers so that our customers can bene�t from competitive prices and secure supply from multiple sources.’

Niels den Nijs, Commercial Director, Titan LNG, also commented: ‘To serve our customers both Titan LNG and Rolande LNG provide full service solutions differing only in the last stage of the chain.’

He continued: ‘Rolande LNG focuses on trucks in the transportation sector and Titan LNG on the industrial sector and shipping sector. Even the infrastructure to store the gas in liquid form is similar.’

Lukoil develops VGP compliant lubesRUSSIA ___________________________________________________

Lukoil Marine Lubricants has developed a new oil product line with Fuchs Europe Schmier-stoffe GmbH, in response to the recent US Vessel General Permit (VGP) regulations.

The VGP requires that rapidly biodegradable oils called Environmentally Acceptable Lubricants (EAL) are used in interfaces where oil can contaminate seawater. The regulation applies to non-recreational vessels of more than 24 metres (m) in length that operate in US coastal waters.

The requirements of the new legislation have implications for many underwater components of a vessel, the lubricant supplier says, with examples including the stern tube seal and the mechanics in the variable pitch

propeller.Lukoil and Fuchs’s new products

use selected saturated ester oils, ful�lling requirements for both safe and environmentally friendly ship operation. According to Stefan Claussen, Technical and Marketing Director at Lukoil’s Hamburg of�ce, the products comply with all EAL requirements ‘whilst providing at least the same quality as the previously used mineral oils’.

The new product line includes gear oils, hydraulic oils and greases for all common applications in oil-to-water interfaces. The series comprises the Lukoil grades Plantosyn, Plantogear and Plantogel, which are produced by Fuchs Europe.

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news in briefNETHERLANDS ____________First for freightThe Port of Rotterdam announced that the Netherlands retained its position as the largest maritime freight transport country in Europe in 2012, a title held since 2010.The data, collected by Eurostat, shows the Netherlands handled 543 million tonnes of seaborne goods, representing 14.6% of the 28 European Union member states’ (EU-28) total. This was followed by shares of 13.4% and 12.8% from the United Kingdom and Italy respectively.The inward movement of goods, which is mainly comprised of liquid bulk goods such as crude oil and oil products, accounted for around 61% of the total tonnage of goods handled at EU-28 ports. This sector did, however, see a decrease of 2.3% in 2012 compared to the previous year.The liquid bulk sector breakdown was similar to total tonnage, with the Netherlands (274 million tonnes), the United Kingdom (211 million tonnes) and Italy (196 million tonnes) all ranking in the top three.

ICS asks IMO to prioritise carbon dioxide monitoringUNITED KINGDOM __________________________________________

The International Chamber of Shipping (ICS) has called on the International Maritime Organi-zation (IMO) to work on a system for monitoring and reporting vessels’ carbon dioxide (CO2) emissions, before focusing on indexing ships by ef�ciency.

At a seminar for members of the Consul-tative Shipping Group (CSG) of maritime administrations, the ICS said that it currently opposed a mandatory system of energy indexing, adding that the question of whether or not this should go ahead should only follow the development of a mandatory global CO2 emissions reporting system.

In March, the IMO Marine Environment Protection Committee (MEPC) will discuss the development of a CO2 emissions monitoring and reporting system.

The ICS said that it supported this drive, but advised that the mechanism should be simple to administer and primarily based on fuel consumption, and that the system itself should not be used for the development of a full

blown market based measure. It supports the ‘three phase’ approach to the development of a global system proposed by the United States.

The ICS has made a detailed submission to the MEPC meeting on the issue of CO2

monitoring and reporting on behalf of its member national shipowners’ associations.

ICS Director External Relations, Simon Bennett, said: ‘In order to make progress and discourage regional regulation, we think that the MEPC should initially focus on how information about emissions should be collected before launching into detailed discussions about ef�ciency indexing of ships, on which there is little global consensus. If they so wish, IMO member states can always return to the question of ship indexing once a CO2 monitoring system has been established.

‘In order that the systems can be compatible, it will be helpful if EU Member States could defer reaching agreement on any regional EU regulation until IMO has had time to make progress on a global system.’

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AGCS outlines future shipping challengesEUROPE __________________________________________________

A new study of safety in the shipping industry suggests that future challenges will be driven by innovations such as the utilisation of bigger vessels, and switches to alternative fuels and routes.

According the Allianz Global Corporate & Speciality SE (AGCS) Safety and Shipping Review 2014, the projected increase in the use of lique�ed natural gas (LNG) to power ships is one emerging risk that will create challenges for the marine industry and the insurance sector.

AGCS says that emerging safety concerns in this area relate to the fact that the industry will see the rise of ports that have never previously handled LNG providing bunkering stations on dock.

It has called for a change in mindset and training, citing concerns regarding storing the LNG as fuel and handling it onboard vessels.

The use of LNG as a marine fuel is expected to dramatically increase over the next few years, driven to a large extent by a rise in demand for ‘greener’ fuels. According to DNV GL, almost 1,800 vessels are expected to be powered by LNG by 2020.

The report also highlights risks related to a continuing trend for larger-sized vessels,

developed to capitalise on economies of scale. ‘The claims arising out of maritime

emergencies of these ‘mega ships’ can be huge. For example, just think of the business interruption of ports and terminals if an accident were to block the entrance,’ said Dr Sven Gerhard, Global Product Leader, Hull & Marine Liabilities, AGCS.

‘In addition, salvage might require unprec-edented efforts and complex operations – in some cases it may take many months, or possibly a year or longer, to remove all the containers, particularly if the accident were to happen in a remote location.

‘The large loss potential has increased for events which are not extraordinary on these big ships. And these are unchartered waters for salvors,’ Gerhard commented.

The study also suggests increased risk parameters in Arctic trading routes, pointing out that shipping casualties in Arctic Circle waters have increased to an average of 45 per year during 2009-2013; up from seven per year during 2002-2007.

A third of these incidents have been attributed to damage to machinery, which says AGCS, re�ects the harsher operating environment.

news in briefBELGIUM _________________First bunkering for hybrid bunker bargeThe MTS Martinique has carried out its �rst bunkering operation at the Port of Antwerp. Christian Kint, CEO of Oilchart International NV, told Bunkerspot that the hybrid bunker barge provided 680 metric tonnes (mt) of HSFO and 120 metric tonnes (mt) of marine gasoil (MGO) to the Grande Colonia which was en-route to Portbury in the United Kingdom.The bunker barge will operate between Antwerp, Ghent and Flushing, and Kint added that the company has already noticed a reduction in fuel consumption. He said: ‘The engine is consuming around 30% less as it travels from Rotterdam to Antwerp, so economically and environ-mentally, it is far better.’The hybrid barge utilises two generators, with the secondary option of a diesel engine, ensuring that it produces zero emissions.

Compact technologyWärtsilä has released details of its new inline scrubber system, which will be used for the �rst time on Color Line’s SuperSpeed 2 ferry. The new compact scrubber system is designed to operate as a conventional Wärtsilä open loop scrubber system, but with three water inlets in the main body of the scrubber, instead of two in the conven-tional system. It works by spraying water in stages in a counter �ow to the exhaust. The exhaust �ows enter from the bottom and exit at the top, and a Wärtsilä-designed water trap prevents the scrubbing water from entering the engine.Wärtsilä says that the system is particularly compact and space saving, which helps ‘in smaller vessels and when being retro�tted’. It also says that installations are completed more quickly, and the vessel’s out-of-service time is reduced, given that each engine requires only one scrubber system.

New Nor-Line LNG launchThe �rst of two lique�ed natural gas (LNG)-powered cargo vessels built for Nor-Lines by Tsuji Heavy Industries was launched in March.The two 5,000 deadweight tonne (DWT) vessels are to be deployed on a route from the Netherlands to Hammerfest in Norway.

Norton Rose Fulbright survey flags up downturn in shipping volumesEUROPE __________________________________________________

A major transport survey from Norton Rose Fulbright shows that shipping has seen the largest dip in business volumes since 2008 in comparison to aviation and rail.

In the Way Ahead survey, 44% of shipping respondents estimated that business volumes have fallen by over 5% since 2008, compared with 24% of rail respondents and 20% of aviation respondents.

The survey also suggested that a reduction in bank liquidity is driving the transportation sector as a whole to look at alternative forms of �nance.

Nearly a quarter (23%) of all respondents anticipate that their primary form of funding will come from private equity over the next two years, with the highest demand anticipated by the shipping sector (31%). It is also anticipated that capital markets will provide a primary source of funding for 16% of all transport respondents.

The transport industry as a whole is taking

strategic measures ahead of further anticipated economic uncertainty, with two-thirds of all respondents reducing, or intending to reduce, operating costs and 41% of all respondents planning to retain cash. Some 57% of all respondents expect a merger or a joint venture to form a key part of their strategy over the next 12 months.

Harry Theochari, global head of transport, Norton Rose Group, commented on the survey’s �ndings: ‘Shipping is facing a number of challenges, re�ected in the fact that business volumes are felt to have dropped more signi�-cantly than aviation or rail in this survey.

‘The key strategic �ndings of this survey, from a purely business perspective, are that cash and the availability of cash is fundamental, and keeping operational costs down is imperative. In this time of highly developed economic modelling and sophisticated economic theory, basic business principles continue to apply.’

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news in briefUNITED STATES ___________Sanctions reviewThe United States Department of the Treasury’s Of�ce of Foreign Assets Control (OFAC) is to host a Sanctions Symposium aimed at taking a comprehensive review of OFAC and US economic sanctions.The symposium in Washington D.C. will include presentations on sanctions relating to trade, insurance and banking.

Terminal lease agreementIn February, TransMontaigne Partners LP agreed to lease capacity at two Florida marine fuel terminals, bringing an end to the existing deal with Morgan Stanley.It is reported that the new occupant is Chemoil Energy Ltd, which is majority-owned by Glencore Xstrata.The tank space amounts to an aggregate capacity of 1.35 million barrels at terminals in Port Everglades and Fisher Island, with the latest two-year deal commencing on 1 June.Chemoil has recently expanded its bunker business in the United States, having acquired Colonial Group’s bunkering sector in the ports of Savannah, Charleston and Jacksonville in July 2013.This was the second such lease in February, with TransMontaigne agreeing a similar deal concerning two oil product terminals and a pipeline with Magellan Pipeline Company LP.

POLB eco agreementA 24-year agreement has been signed to help reduce the cost of shore-side power at the Port of Long Beach.Reduced electricity rates, approved by the California Public Utilities Commission (CPUC), are expected to result in savings of around 15% each year for maritime operators at the port. Compared with current rates, it is expected that a reduction of around $350 million will be achieved.California has strict requirements that at least half of all container ships which visit the port should run on shore-side electricity at berth, and higher compliance rates will be phased in over the next six years.As part of the newly-announced agreement, major electric infrastructure will be introduced at a cost to the port or its tenants, as well as new electric lines with voltage increased to 66 kilovolts (KV) and new substations.

LNG America awards bunker barge design contractUNITED STATES ____________________________________________

Jensen Maritime has been awarded a contract to design lique�ed natural gas (LNG) bunker barges for LNG America LLC.

The naval architecture and marine engineering company, part of Crowley Maritime Corporation, will design some of the �rst LNG barges for the fuel supply and distri-bution company, LNG America.

The vessels have a planned capacity of 3,000 cubic metres (m³) and it is hoped that they will serve a dual purpose, moving LNG from LNG America’s supply source to coastal-based storage and distribution terminals, as well as directly bunkering large ships.

Keith Meyer, CEO of LNG America, said: ‘Through LNG America’s LNG bunkering initiative, we plan to serve and facilitate the growing marine demand for LNG.

‘LNG America sees the demand for marine LNG to be robust as long as LNG can be made available to the maritime industry on a reliable, dependable and cost-competitive basis. Our mission is to deliver competitively priced LNG as fuel where needed, when needed and in the quantity needed.’

Vice President of Jensen Maritime, Johan Sperling, said of the deal: ‘The signi�cance of this agreement is not only incredible news for the marine industry, which struggles with whether to develop LNG infrastructure or vessels �rst, but also for companies along the US Gulf Coast that hope to replace their traditional vessels with cleaner, more ef�cient LNG-powered ones.’

The barges are expected to be delivered in late 2015.

AAPA criticises DERA budget cutsUNITED STATES ____________________________________________

The US Fiscal Year Budget 2015 has been hit with criticism from the American Association of Port Authorities (AAPA) as it proposes to eliminate a signi�cant emissions control programme.

The budget has proposed that the Environmental Protection Agency’s (EPA) Diesel Emissions Reduction Act (DERA) grant programme should be axed.

DERA was introduced with the aim of aiding ports in reducing their emissions from older diesel engines, a task which the AAPA believe has been ‘highly successful’. Despite this, the budget has stated that the programme should be eliminated in order to fund other priorities. Kurt Nagle, AAPA’s President and CEO, said that the AAPA will ‘continue to press Congress for continued funding for DERA’.

Wärtsilä propeller shaft sealing systems meet VGP guidelinesUNITED STATES ____________________________________________

Wärtsilä has said that existing users of its Airguard and Oceanguard propeller shaft sealing systems will not have to change from mineral oil to an Environmentally Acceptable Lubricant (EAL) in US waters – because the systems already meet guideline requirements.

The company says that the systems meet the de�ned regulatory prerequisites set out in the Environmental Protection Agency’s (EPA) 2013 revised Vessel General Permit (VGP).

Compliance means that owners and operators of commercial vessels of 79ft (24 metres) and over sailing within US waters using either of the Wärtsilä systems will not be required to make a switch to an EAL.

‘With the Wärtsilä Airguard and Oceanguard

propeller shaft sealing systems there is no oil-to-sea interface,’ clari�ed Wärtsila .

The Wärtsilä systems work by capturing water or leakage within an air chamber or separation space within the seal. This captured �uid is then transferred to inboard tankers for monitoring and further treatment, avoiding oil drips or leakage into the sea.

‘The EPA requires these designs to be functioning normally, which can be assured by proper operation and maintenance according to Wärtsilä’s guidelines,’ said the company.

‘In case of system failure, both systems also prevent any reasonable possibility of oil leakage, which is the second criterion for the continued use of mineral oils.’

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DNV GL offers EAL reporting serviceUNITED STATES ____________________________________________

DNV GL has launched a new report service in relation to the use of Environmentally Acceptable Lubricants (EAL) in US waters.

In response to the Vessel General Permit (VGP) framework, which came into effect in December 2013, DNV GL has made available an EAL Report Service to provide feedback on areas of concern and help ship operators comply with the new rules.

The VGP framework stipulates that EAL must be used at all oil-to-sea interfaces, where technically feasible. The standard is applicable for ships with a total length of 24 metres (m) or more.

DNV GL notes that numerous components in the underwater area of a ship – such as the stern tube seal and the rudder shaft – are

impacted by the new regulations, whilst proper documentation is required onboard in order to be able to adhere to the VGP.

In addition, the new DNV GL Report Service will include the issuing of an EAL Factual Statement of Compliance in order to ful�ll the EAL requirements required of shipowners.

‘We have received positive feedback from the US EPA agency and the Coast Guard on our new service,’ said Dr Jörg Lampe, Risks & Safety, Systems Engineering at DNV GL.

Lampe described the new Report Service as ‘an ef�cient and reliable service that makes it easier for ship operators to comply with the new regulations and to correctly create the reports due at the end of the year’.

EBDG receives AIP for LNG combination bunker bargeUNITED STATES ____________________________________________

The Elliott Bay Design Group (EBDG), a naval architecture and marine engineering �rm, has obtained approval in principle (AIP) for the design of a 2,000 cubic metre (m³) lique�ed natural gas (LNG) combination bunker barge.

The EB-2000 LNG was given AIP by the American Bureau of Shipping (ABS) and will be one of several LNG barge designs to be developed by EBDG. The design also includes a marine diesel fuel tank, enabling the bunker barge to refuel dual-fuel vessels.

Director of Global Gas Solutions at ABS, Roy Blieberg, said: ‘At ABS our goal is to help designers, shipyards, and operators bring new and novel concepts to the marketplace in a safe and effective manner.

Blieberg continued: ‘The EBDG combination bunkering barge takes an innovative approach to meeting the challenges of LNG bunkering, a hurdle that must be crossed for LNG-fuelled operations to become truly effective in the United States.’

news in briefUNITED STATES ___________San Diego terminal begins cold ironingThe Port of San Diego has begun cold ironing at its Tenth Avenue Marine Terminal, allowing refrigerated cargo ships to plug into shore-side power whilst at berth.Construction on the project had been underway since mid-2013 at a cost of $4.25 million.The installation of shore power will help to reduce greenhouse gas emissions (GHG) by more than 2,000 metric tonnes (mt) each year. It is estimated that emissions of nitrogen oxide (NOx) will be reduced by around 70 tonnes per year.The Port of San Diego says that the use of shore-side power will help to improve air quality around the terminal, with the community of Barrio Logan being the closest neighbourhood to be impacted.The project answers a California Air Resources Board (CARB) mandate that requires California ports and terminals to provide shore power to container, passenger and refrigerated-cargo ships.Ships that berth at the Port of San Diego’s B Street Pier Cruise Ship Terminal and Broadway Pier are already able to use shore power.

MEXICO __________________Veracruz welcomeBunker’s Mexico Group has announced that, following the inauguration of the country’s �rst independent bunker terminal, it is to introduce the bunker barge Paci�ca II at the Port of Veracruz.The Paci�ca II has the capacity for 1,200 metric tonnes (mt) of intermediate fuel oil (IFO) and 320 mt of marine gasoil (MGO). The company has also said that the barge can carry RMG 380 and low sulphur DMA MGO.‘Positioning this asset in Veracruz will enable us to provide the services desired by the customer base and spur growth in this area,’ said Luis Medina, CEO of Bunker’s Mexico Group.The new facility has the potential to store 20,000 mt both on land and water, with Medina adding that, ‘establishing the �rst ever independent bunker terminal in Mexico is a major step in the growth of our business on the Paci�c side. ‘This improvement in the supply chain will translate into faster and more ef�cient service to our customers.’

Companies fined for fuel violationsUNITED STATES ____________________________________________

The California Air Resource Board (CARB) has �ned 12 shipping companies for failure to switch from traditional diesel bunker fuel to cleaner, low-sulphur marine distillate fuel upon entering regulated Californian waters, as required by state law.

CARB revealed it had �ned the companies a combined $476,750, with all companies reportedly taking prompt action upon being noti�ed of their breaches.

The companies �ned were: • Univan Maritime Ltd. (Hong Kong) -

$78,250 / Maersk Wolfsburg• Firon Shipping Inc. (Cyprus) c/o XT

Shipping Group - $68,000 / Blue Diamond• W. Bockstiegel GmbH & Co. Reederei KG

(Germany) - $55,500 / BBC Arizona

• MK Shipmanagement Co., Ltd (Tokyo) - $53,000 / Ocean Seagull

• Cosco Maritime Ltd (UK) - $34,500 / Antwerp

• Triton Schiffahrts GmbH - $30,250 / Eagle Bay

• Dumun Marine S.A. (Panama) - $30,250 / Dumun

• Peter Doehle Schiffahrts (Germany) - $27,750 / Fanfare

• Byzantine Maritime Corporation (Greece) - $27,750 / Ermione

• Crowley Technical Management Inc. (Florida, USA) - $27,750 / Ocean Crescent

• BigLift Shipping B.V. (Netherlands) - $23,750 / Happy Dynamic

• YA-SA Tanker and Transportation (Turkey) - $20,000 / Golden Horn

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news in briefUNITED STATES ___________Smart optionIngram Barge Company has announced its participation in the SmartWay Transport Partnership, a fuel-saving organisation that helps businesses with energy-ef�cient movement of goods.The company will take part in SmartWay’s new Barge Freight component, set up this year to help shippers determine the carbon produced by their freight supply chains and to see the environmental bene�ts of moving freight via barge transport.Ingram has held a role helping the United States (US) Government’s Environmental Protection Agency (EPA) to develop, test and pilot the tool since 2010. SmartWay is a public-private partnership between the EPA and private industry freight carriers and freight users. It works to help companies use less fuel, leading to cost savings and reductions in carbon, oxides of nitrogen and particulate matter emissions.

CANADA _________________Pollution detection stepped up The Government of Canada is set to step up efforts to monitor and detect ships’ pollution within the country’s waters.Funding for its National Aerial Surveillance Programme (NASP) has been increased to $47.6 million over the next �ve years; the increase will enable more �ights to monitor pollution in the country’s waters.The NASP has a �eet of three aircraft across the country that collectively spends 2,080 hours airbourne. According to Raitt, that time will now increase to 3,750 hours.On the West Coast, surveillance hours will be increased from 500 to 700 hours within the next three years, and to 1,200 hours thereafter.

UNITED STATES ___________Houston Channel collisionIn March, the Houston Ship Channel was closed following a collision between a bulk carrier and a bunker barge.The collision resulted in the release of some 168,000 gallons of fuel into the water.A US Coast Guard statement said that the 585-foot bulk carrier, Summer Wind, had collided with a bunker barge carrying 924,000 gallons of fuel oil, which was under tow by the MV Miss Susan.

Quadrise issues progress report on MSAR fuel programmeUNITED STATES ____________________________________________

Quadrise Fuels has extended its royalty agreement with Maersk and has provided an update on its MSAR programme.

The royalty agreement provides the legal framework and key terms for future commercial supplies of marine MSAR fuel to Maersk and to third parties when the current programme moves from development to commercial production and fuel supplies.

In a statement, Quadrise said that the agreement has now been extended up to 31 December 2022 – an extension of three years over the original 31 December 2019 expiry date.

The company also provided a progress report on its current MSAR programmes.

The two seaborne programes on which the Maersk Proof of Concept (POC) con�rmation is based are moving forward independently. The �rst phase of the Wärtsilä seaborne programme has been completed and the �nal phase will include high load tests and continuous operations using the fuel. Some minor modi�cations are currently being made to the installed test equipment and this phase is expected to be completed by early in Q2 2014.

In the case of the MAN Diesel & Turbo programme, the scheduled land-based tests required to determine the settings for seaborne

service have not yet been completed.In its statement, Quadrise said that this is

due to ‘third party delays which are unrelated to MSAR’. It is planned to obtain MAN Diesel POC con�rmation during Q2 2014.

As previously announced, Quadrise MSAR technology has also been approved for instal-lation in Saudi Aramco re�neries and a number of project opportunities have already been identi�ed.

Quadrise and its Saudi partner, Ra�d, met with the Aramco team in Saudi Arabia in January to review the requirements and the proposed timetable for the installation of the �rst manufacturing unit. It is the intention of all the parties involved to have the fuel system designed, installed and operational ready for a demonstration phase during Q4 2014.

In South America, an on-site review at the Ecopetrol re�nery in Colombia was undertaken in December and work is now ongoing to complete an MSAR manufacturing study.

Commenting on the latest developments, Ian Williams, Quadrise Chairman said: ‘There has been an unprecedented interest in Quadrise over recent months which correlates with the step-change in market capitalisation and a growing appreciation of the “game changing” potential of our project programmes.’

OW Bunker expands US physical supplyUNITED STATES ____________________________________________

OW Bunker is set to supply bunker fuel at the ports of Los Angeles and Long Beach.

In a further expansion of its North American operations, the bunker supplier will take storage at the Vopak terminal in Los Angeles, working closely with barging company Westoil Marine Services.

Supplies will be provided to customers at all berths and anchorages at the ports; the products will be fully-tested and independently veri�ed, according to OW Bunker.

Deliveries will be provided by a 5,395 deadweight tonnne (DWT), 2008-built double-hulled bunker barge with pumping rates averaging 715 metric tonnes (mt) per hour.

OW Bunker says it is looking to supply a full range of products, including RMG 380 (high sulphur fuel oil (HSFO)) and low sulphur fuel oil (LSFO), RMK 500, RMK 700 and marine gasoil (MGO).

Adrian Tolson, Regional Manager, OW Bunker North America, commented: ‘Expanding our operations into the ports of Los Angeles and Long Beach is a natural evolution as we look to grow our presence and support for our customers within North America.

Tolson continued: ‘Providing a fully integrated, and end-to-end physical solution for our customers that drives ef�ciencies into their operations, and is �exible to suit the demands of their businesses, is central in helping them to manage fuel costs and operate pro�tably.’

The new move comes less than 18 months after OW Bunker launched a physical supply operation offshore in the Gulf of Mexico. It also recently signed a deal with UNIPEC America to provide products at Houston’s Battle�eld Oil Speciality Terminal Co. (BOSTCO) fuel oil terminal.

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news in briefUNITED STATES ___________In the pipelineW&O has been named as the exclusive North American marine distributor for Perma-Pipe Inc., where it will contribute to the lique�ed natural gas (LNG) bunker fuel supply.W&O will offer a stainless steel construction, as well as a pre-engineered and pre-fabricated piping system, for bunker companies throughout North America. Matthew Hallisey, Engineered Solutions Product Manager for W&O, said: ‘Although LNG-fueled vessels are fairly new to the North American market, W&O has dedicated resources to this emerging technology, and we are engaged in conversations with naval architects and owner-operators about new projects. Perma-Pipe, along with Bestobell Cryogenic Valves, will strengthen our ability to support marine LNG projects from design to completion.’Perma-Pipe, a subsidiary of MFRI Inc., will contribute its Fuel-Guard system – a double-walled construction with testing and traceability on all materials – to the partnership. According to the company, the LNG piping insulation uses the latest nano-technology, enabling a reduction in insulation thickness and a reduction in the overall size of the system.Michael Hume, President and CEO of W&O said: ‘This distribution agreement with Perma-Pipe is just one more way W&O is working to be at the forefront of the LNG movement in North America and a total solutions provider to our customers.

Fuel sourceA new source of low sulphur bunker fuel has entered the market as a result of expansion by Continental Re�ning Company (CRC).CRC has announced that it has commenced the production of a special blend distillate fuel, similar to DMA grade marine gasoil (MGO).The low-sulphur fuel has a T-90 greater than 700°F and contains less than 1,000 parts per million (ppm) sulphur. Produced in a re�nery with a capacity for 30,000 barrels per month, it is already being supplied on the US east coast for use by oceangoing vessels. The primary market for the supply is the Ohio River.

WoodMac publishes Canal reportPANAMA __________________________________________________

Recent cost overruns on the Panama Canal expansion should be resolved with limited disruption to global trade, according to Wood Mackenzie.

However, the company has warned that if delays continue beyond 6-12 months, they could threaten the investments of a signi�cant number of groups.

Whilst it expects that the gridlock should be resolved ‘given the enormous strategic and �nancial implications of the Canal to Panama’, the company has outlined its expectations of the possible impact that further delays could have on coal, gas and oil trades.

It has warned that signi�cant disruptions would not only crimp pro�tability for US lique�ed natural gas (LNG) producers but would also create a tighter LNG shipping market and affect the US Gulf Coast petrochemical industry.

Among Wood Mackenzie’s predictions, should further setbacks occur, is that a delay until early 2016 would impact the �rst US Gulf LNG exports from Sabine Pass, imposing a higher shipping cost to target markets in Asia due to the need for vessels to take a longer

route via the Cape of Good Hope. However, WoodMac notes that in this case the differential between US and Asian gas prices would still make the trade pro�table and initial volumes would be small as the project ramped up.

The expansion of the Panama Canal will have a number of bene�ts for users depending on the position of ports in relation to the canal. The United States is expected to bene�t from its expansion, as its cargo accounts for 65% of total cargo moved through the canal.

Jaime Correal, Senior Coal Markets Analyst at Wood Mackenzie, commented: ‘When completed, US coal suppliers will see some of the greatest bene�ts from the expansion as they will realise substantial cost and time savings, even when compared with Colombian and Venezuela suppliers. The shortening of the route to Asian markets will result in greater opportunities.’

Work on the Panama Canal’s expansion project has encountered setbacks recently due to a dispute over cost overruns between the Panama Canal Authority (ACP) and the project’s contractors.

Port of Portland expresses concern over crude by rail transportationUNITED STATES ____________________________________________

The Port of Portland has weighed into the debate on the safe transportation of crude oil by rail, saying that it is closely monitoring developments in the market.

The port says that within the last year it has received a number of enquiries about its capabilities in relation to the storage and/or transfer of US and Canadian-produced crude oil arriving by rail.

Due to what it terms as a ‘seriously constrained or non-existent’ pipeline transport capacity from production regions to re�neries, the Port has noted the demand and opportunity for large quantities of crude oil to move by rail whilst highlighting concerns regarding the safety of the process.

‘Since 2008, there have been approxi-mately 10 derailments,’ the port noted, drawing particular attention to several recent events, particularly involving the transport of light Bakken crude oil in rail cars.

One high pro�le example of an oil train derailment incident took place in Lac-Mégantic, Quebec, last year, and was followed in January 2014 by a proposal by Transport Canada for

new standards for DOT 111 tank cars.Canadian oil imports to the United States

have increased 57% over the last decade, replacing imported oil from Mexico and Venezuela.

The Port of Portland commented: ‘The sudden and remarkable transformation of North American oil production, derived from shale and oil sands, is driving much of this new activity.

‘We, like the rest of those monitoring this energy transformation–which includes our state, city, and local communities–are following developments with interest and, where appropriate, will engage with policy makers, our community, and the transportation industry to ensure that the important issues surrounding the safe and secure transportation of these products are fully addressed.

‘Our interest will begin to grow once we have the con�dence that transportation of crude oil by rail continues to meet all state, federal and local transportation rules and regulations and exhibits a suf�cient accident-free record for a sustained period of time.’

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news in briefBRAZIL __________________Oil skimming contractAqua-Guard has recently signed a contract to supply two large URO 300Z1 offshore oil skimming systems to Damen Shipyards.The shipyard is currently constucting two Oil Spill Response Vessels (OSRVs class 1050) for the Brazilian company GeoNavegação., which will patrol the offshore regions of Brazil in the event of an oil spill.Each vessel will be equipped with an Aqua-Guard URO 300Z1 offshore oil skimming system, which provides the OSRVs with the ability to recover in excess of 300 cubic metres (m³)/hour of oil.The company has said that the systems are ‘designed using only one skimmer head, which drastically reduces response time, increases storage space onboard the vessel and increases the safety of the equipment operators as minimal additional set up is required.’

UNITED STATES ___________DSOX-15 test resultsIn March, Poly Shield Technologies announced that DNV GL has completed its report on the company’s DSOX-15 Pre-Combustion Fuel Purif ication Technology.The technology was tested at Poly Shield’s facility in Fort Lauderdale with results said to con�rm that intermediate fuel oil (IFO 380) with a sulphur level of 2.70% achieved a reduction to 0.27% sulphur content after treatment with the DSOX-15 Fuel Puri�-cation system.Jans Hagen Andersen, Principal Engineer at DNV GL Maritime Advisory said: ‘The test results we observed in the test facility are a signi�cant indication of the capabilities of the DSOX-15 Fuel Puri�cation Technology to reduce high sulphur marine fuels below the current target of 0.50%.’

AMERICAS ________________New charterA �fteen-year charter on a new eco-vessel has been agreed between NYK Bulk & Projects Carriers Ltd and Baja Bulk Carriers S.A. The Panama-�agged bulk carrier, which is being built by Oshima Shipbuilding Co. Ltd, will feature an eco-ship structural design and will be equipped with an advanced electronically controlled engine.

Cold ironing for Port of HalifaxCANADA __________________________________________________

Cruise vessels calling at the Port of Halifax will soon be able to switch to shore-side power, after installation began at the site.

The project to make shore-side power available at the port was �rst announced in January 2013, and the Halifax Port Authority aims to allow cruise vessels to carry out cold ironing during the 2014 cruise season.

Typically, vessels are in port for around nine hours, and connecting to shore power cuts carbon dioxide (CO2), nitrogen oxide (NOx), sulphur oxide (SOx) and also particulate matter (PM) emissions from vessels’ auxiliary generators.

The tariff for the project at the Port of Halifax was developed in partnership with Nova Scotia Power. Transport Canada will

provide up to $5 million in funding, with an additional $3.5 million from both the Province of Nova Scotia and the Port of Halifax.

Funding for the Shore Power Technology for Ports Program is provided under the Clean Transportation Initiatives in Budget 2011 as part of the renewal of the Government of Canada’s Clean Air Agenda.

‘This project is an example of what we all need to do – identify an opportunity that will drive our economy forward and then make it happen,’ said Economic and Rural Development Minister Michel Samson. ‘The Halifax Port Authority has shown leadership in developing this shore power system, and the province is proud to partner with Transport Canada to support the Port’s initiative.’

Wärtsilä onboard for Totem Ocean’s Orca Class conversionsUNITED STATES ____________________________________________

Totem Ocean Trailer Express (Totem Ocean) has announced that Wärtsilä will supply the main engines, generators and lique�ed natural gas (LNG) storage and fuel gas handling systems onboard the company’s two Orca Class roll-on/roll-off (ro-ro) cargo ships – which are soon to be converted to run on LNG.

The MV Midnight Sun and MV North Star transport around one-third of all the goods required by the inhabitants of Alaska and they are soon to be part of the largest LNG conversion project ever to be undertaken in

North America.Each vessel will be equipped with four

12-cylinder 50DF dual-fuel engines and generator sets, which are designed to enable �exibility with fuel while maintaining high output. The dual fuel capacity means that the vessels will be able to run on natural gas, light fuel oil or heavy fuel oil.

In order to store the LNG, Wärtsilä will provide two 1,100 cubic metre (m³) fuel storage tanks, along with the associated automation and fuel gas handling systems (LNGPac).

ABS joins consortium to identify next-gen materials technologyUNITED STATES ____________________________________________

Marine and offshore classi�cation society ABS has welcomed the award of funding for research into next generation materials that will help improve the marine transportation sector.

The company is one of 60 members of a new consortium that will pioneer new technology development and research in the �eld of lightweight and modern metals manufacturing.

The American Lightweight Materials Manufacturing Institute (ALMMII) has been tasked with developing innovative lightweight metal production and component/subsystem manufacturing technologies, with a particular

focus on assisting multiple modes of transpor-tation; aviation, land and marine.

ABS Chairman and CEO Christopher J. Wiernicki said: ‘ABS is consistently focused on identifying novel and innovative concepts that aid the marine and offshore industries in improving the design, construction and maintenance of their assets. The institute is a natural avenue to leverage ongoing ABS technology development in next-generation materials, metals and joining technologies. We are proud to be members of ALMMII and are thankful for the trust placed upon the team by the US government.’

news americas



news in briefUNITED STATES ___________Quadrise Fuels raises £10.7 millionQuadrise Fuels International has raised a total of £10.7 million ($17.9 million) through a placement of new ordinary shares.A total of 33.4 million shares in the company were placed with institutional and other investors, with Peel Hunt LLP acting as sole broker and bookrunner for the company’s placement.The gross proceeds of £10.7 million ($17.6 million) before expenses will be used to help the company advance each of its current active programmes, as well as pursue new projects and strengthen its balance sheet.Quadrise is the supplier of MSAR, which is an alternative to heavy fuel oil in the shipping, re�ning and power generation markets. The additional project capital will allow Quadrise to expedite deployment of MSAR manufacturing units on commercialisation, fund its research and development facility, protect existing and future IP and also recruit additional specialist staff.

Short sea shipping mandate under fireUNITED STATES ____________________________________________

In March, members of the US Congress heard from shipping industry representatives who outlined the ‘�awed design’ in the Environ-mental Protection Agency’s (EPA) low sulphur fuel mandate. The rule requires vessels travelling within the 200 nautical mile (nm) boundary of the North America Emission Control Area (ECA) to run on low sulphur fuel.

Rod Jones, President and CEO of the CSL Group and Bill Terry, President and CEO of Eagle Rock Aggregates, delivered testimony detailing how the ‘well-intentioned’ regulation would only serve to spur increased onshore air pollution and create higher shipping costs.

Rod Jones was particularly critical over how the legislation would affect companies reliant on the short sea shipping industry. Jones and Terry suggested that the EPA has not taken the short sea industry into account, adding that the low-sulphur fuel’s price tag will result in cargo being shifted onto substantially less environ-mentally sound shipping modes such as trucks and trains.

Prior to the hearing, Rod Jones had published a report on his impending testimony,

where he spoke of the current bene�ts of short sea shipping.

‘One of the great bene�ts of short sea shipping is that it uses less fuel and emits less carbon than rail and truck-based transportation. A single gallon of fuel can transport a ton of cargo over 1,000 miles by ship. Just one ship can carry the same load as 1,923 trucks or 819 rail cars, saving fuel, reducing greenhouse gas emissions, and preventing congestion on our roads and in our cities.’

While Jones said he understood that for trans-ocean vessels the regulation may be appropriate, he believed that changes to the short sea shipping industry may not be necessary.

‘This restriction may work for trans-oceanic vessels, which spend only a small fraction of their total voyage in areas covered by the North American ECA.

‘But for short sea shipping, where ships almost never leave the 200 nautical mile (nm) limits, the price of complying would be prohibitive. We estimate this will add up to about $815,000 in additional fuel costs per vessel.’

Bomin is an international company operating around the globe, with more than 35 years of experience in the bunker market. Our business portfolio covers activities ranging from cargo trading to the supply of bunker fuels, lubricants and other services. Whenever and wherever you need us. Choose a dynamic partner: www.bomin.com

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news in briefCHINA ___________________Options exercisedLomar has declared three further options for the construction of fuel-efficient containerships at Chinese shipyards.The declaration of a further purchase option brings Lomar’s total �rm orders to �ve at China’s Guangzhou Wenchong Shipyard and the company has announced two �nal options in a total order of six vessels from the Yangzijiang shipyard. All of the newly-declared vessels will be designed by the Shanghai Merchant Ship Design and Research Institute (SDARI) and will feature improved fuel consumption.

Fuel ef�ciencySinopaci�c Shipbuilding Group has been awarded a contract to construct two next generation Crown MHI 82 bulk carriers.The contract with Shandong Bohi Industry Co Ltd. will see two 82,000 deadweight tonne (DWT) carriers built, with the option for the construction of two further vessels.The next generation build will see optimi-sation of the original Crown MHI 82 design, with the new vessels said to be highly fuel ef�cient. The carriers will be delivered from the second half of 2016.

SOUTH KOREA ____________Port of Busan offers eco-incentives

The Port of Busan Authority is offering incentives to ships calling at the port that implement ‘green’ measures.The port joined the Environmental Ship Index (ESI) at the start of 2014. It is now offering clean seagoing vessels a 15% discount on the GT part of port dues in Busan, if they score 31 points or more on the ESI.Busan Port is the first port in the Northeastern Asian region to implement an ESI discount for environmentally-friendly shipping practices.The ESI aims to achieve a reduction in emissions of nitrogen oxides (NOx), sulphur oxides (SOx) and particulates, as well as carbon dioxide (CO2) by initiating changes in behaviour among shipowners/operators and ports.In implementing ESI rewards, the Port of Busan Authority also joins a list of 28 other participating incentive providers that includes the Port of Amsterdam, the Port of Rotterdam as well as the Port of Los Angeles.

UASC exercises final option in LNG-ready multi-vessel programmeMID EAST _________________________________________________

In March, the United Arab Shipping Company (UASC) announced that it had exercised a �nal option for one additional 18,000 twenty-foot equivalent unit (TEU) vessel as part of an order with Hyundai Heavy Industries (HHI) in Korea.

The news means that UASC has now completed the largest newbuilding order in its history; a total of 17 ships worth a collective $2 billion. The full order comprises 14,000 TEU vessels as well as a further six 18,000 TEU vessels. The newbuildings are scheduled for delivery from late 2014 and from the �rst half of 2015 respectively.

Each of the ships has been developed with a focus on cost ef�ciency and environmental

performance, and they will be lique�ed natural gas (LNG)-ready

His Excellency Salem Ali Al Zaabi, Chairman of the UASC Board of Directors, commented: ‘All of these new ships will enjoy the most advanced fuel economy in the industry including, among others, being delivered as “LNG ready”; a �rst in the industry for vessels of this size.

‘Among our other assets, these vessels and UASC’s enhanced partnership agreements enable the Company to improve its competitiveness in the key trade lane between Asia and Europe where the 18,000 TEU vessels will be deployed.’

Shell agrees downstream investmentAUSTRALIA _______________________________________________

A deal worth around A$2.9 billion ($2.6 million) has been agreed for the sale of Shell’s Australia downstream businesses to Vitol.

Shell’s Geelong re�nery and 870-site retail business will be covered under the sale. The agreement also covers Shell’s bulk fuels, bitumen, chemicals and part of its lubricants businesses in Australia, and includes a brand licence arrangement and an exclusive distributor arrangement in Australia for Shell Lubricants.

The deal excludes Shell’s aviation business and also its Brisbane-based lube oil blending and grease plants.

The company’s Australia upstream operations will not be impacted, and investment will continue in this area.

The newly announced deal, which is subject to regulatory approvals, is expected to close this year.

Buyer Vitol described the deal as an ‘exciting acquisition’; Vitol President and CEO Ian Taylor explained that it was, ‘a good company led by an experienced management team and underpinned by the value of the Shell brand.’

Shell has recently made a number of downstream divestments, and these include the sale of re�neries in several European countries, and the sale of downstream businesses in Egypt, Spain, Greece, Finland and Sweden, as well as the creation of a downstream joint venture across Africa with partners, including Vitol.

Teaming up on technologySINGAPORE _______________________________________________

A new laboratory has been set up by Singapore and UK researchers to undertake research and development for the maritime, energy and offshore sectors.

A*STAR’s Institute of High Performance Computing (IHPC) has joined with the Southampton Marine and Maritime Institute (SMMI) to develop technological solutions through modelling and simulation at the new facility.

The research areas are aimed at addressing two major challenges faced by the maritime and offshore sector: the continuing

trend in deep-water offshore oil and gas drilling, and growth in shipping.

With regard to shipping growth, the IHPC-SMMI Joint Lab will concentrate on areas including the increasing size, variety and complexity of ships and a requirement for vessels to be ‘greener’.

The laboratory will also undertake projects in collaboration with other partners in the maritime and offshore industry, such as researchers from the National University of Singapore and the IHPC-Lloyds Register Joint Lab, co-located within IHPC premises.

news asia pacific



news in briefSINGAPORE_______________Best practiceThe Maritime and Port Authority of Singapore (MPA) and the Singapore Shipping Association (SSA) held the �rst series of navigational safety discussions in February – this follows on recent collisions in Singaporean waters.The session was attended by over 100 representatives from the shipping community, including shipowners, ship managers, ship charterers and shipping agents. The event covered the interim measures to be adopted, as well as reminders to the ships’ crew on their responsibilities and practices on the safe navigation of their ships.The MPA is also in the �nal stages of developing a safe passage guide for all mariners navigating in the Straits of Malacca and Singapore, in cooperation with the littoral states of Malaysia and Indonesia and BIMCO.

HONG KONG ______________Marine appointmentThe Government of Hong Kong Special Administrative Region has appointed a new Director of Marine, Michael Wong Wai-lun.Mr Wong’s previous experience includes positions in the former Trade and Industry Branch and the former Economic Services Bureau. He has been Director of Information Services since August 2009.Mr Wong succeeds Francis Liu Hon-Por, who has held the position of Director of Marine since November 2011

ASIA _____________________Fuel costs take tollThe �nancial controller of Shin Yang Shipping Corp. blamed the rising cost of bunker fuel for falling pro�ts in container shipping.Speaking in February, Richard Ling told local media that bunker fuel prices had risen to more than $100 a barrel, compared to the $90-$95 per barrel in the �rst half of last year – and with fuel making up around 30%-40% of the group’s shipping operational cost, the change is a large one.‘The bunker fuel cost has gone up too much and is now on the high side,’ he saidDespite cargo volumes increasing, the competitive nature of the container cargo market has meant that ‘at current rates container shipping was not pro�table.’

MOL installs SCR systems to meet Tier III regulationsJAPAN ____________________________________________________

Mitsui O.S.K. Lines (MOL) has announced that is has installed selective catalytic reduction (SCR) systems onboard one of its Capesize vessels. This will help to reduce nitrogen oxide (NOx) emissions to comply with Tier III regulations.

The system has been installed on the MOL-owned and operated Awobasan Maru.

The company commented: ‘With the

cooperation of Yanmar Co. Ltd, we installed SCR systems on the vessel to be operational from its delivery in December 2013. Since then, the systems have been operated for more than 1,000 hours of testing each.’

The testing process involved using fuel which would match the type that would be available when travelling through emission control areas (ECAs).

UECC contracts KHI for dual-fuelled transport carriersCHINA ____________________________________________________

Two pure car and truck carriers (PCTCs), featuring dual fuel engines, are to be constructed for United European Car Carriers (UECC) after a contract was signed with Kawasaki Heavy Industries (KHI).

The 181 metre (m)-long vessels will be constructed at the shipbuilder’s joint venture NACKS shipyard in China, with delivery scheduled for the second half of 2016.

The vessels have been developed by UECC in collaboration with NYK’s Technical Group and Wallenius Marine, together with Kawasaki Heavy Industries in Japan.

The PCTCs’ deck con�gurations will be optimised for current and expected cargo mixes and they are capable of operating on either lique�ed natural gas (LNG) fuel or heavy fuel oil (HFO) and marine gasoil (MGO).

The ships will be Finnish/Swedish ice class

1A Super vessels, allowing for full-year trading in the Baltic area.

They will also be the �rst PCTCs to be �tted with an LNG-fuel propulsion system, and will be able to complete a 14-day round voyage in the Baltic using solely LNG fuel for main engine and auxiliary power generation.

A number of other design elements and technologies will also help to reduce fuel consumption and emissions.

UECC CEO Glenn Edvardsen commented on the vessel order: ‘The LNG installation is a pioneering design and will be one of the largest employed on a commercial vessel and the largest yet of its kind on a pure car and truck carrier.

‘We are proud of the exciting step UECC is taking towards greener and more environ-mentally friendly shipping.’

‘Lessons not learned’ on engine firesASIA _____________________________________________________

Lessons are still not being learned when it comes to engine �res – this is the advice issued by Graeme Temple, Regional Director of Braemar SA’s Far East Operations, who provided a stark warning that potential problems need to be spotted earlier when it comes to preventing engine �res.

Temple noted that hot spots can be easy to �nd on many vessels, and often readily identi�ed with the use of thermal imaging photographs. The warning followed a review of incidents that took place last year.

‘We attended a signi�cant number of engine-room �res – the industry is still experi-encing far too many unnecessary casualties

where �ammable liquids in engine rooms are �nding their way onto hot spots,’ explained Temple.

Braemar warned of a continuing neglect of areas where �ammable liquids can escape from high pressure (HP) and low pressure (LP) fuel, HP and LP lubricating, puri�er and fuel valve cooling systems.

This is despite the stipulation by IACS rules (and, after 1998, SOLAS Ch 11-2 regulation 15.2.10) that surfaces above 220oC must be insulated or protected to prevent �ammable �uids from igniting.

‘In reality, basic maintenance is all that is required,’ Temple added.

news asia pacific



news in briefSINGAPORE_______________Exit strategyIn February, Chemoil announced that, along with the Glencore Xstrata subsidiary Singfuel Investment, it is seeking a voluntary delisting from the Singapore Stock Exchange.Under the delisting proposal, DBS Bank, for and on behalf of the two parties, will make an exit offer to acquire all the issued ordinary shares in Chemoil held by its shareholders, other than shares already owned, controlled or agreed to be acquired by Chemoil and Glencore. This exit would also cover all new shares unconditionally issued or to be issued pursuant to the valid exercise, prior to the close of the exit offer.

TAIWAN __________________Reduced demand for 380 cst fuelIn late February, Taiwan CPC was reported to have cut back on the production of 380 centistoke (cst) bunker fuel.According to a report from CI Energy, the scaling back of production was prompted by expectations of weaker demand. However, 180 cst fuel oil supply remained buoyant.Taiwan CPC is reported to sell an average of 110,000 tonnes of bunker fuel per month – accounting for over 90% of Taiwan’s bunker sales.

CHINA ___________________Bow technology patentRolls-Royce has announced that China has granted the company a patent for its Environship wave piercing bow technology for merchant vessels.The concept, which can be modi�ed for use on several vessel types, utilises a bow with a vertical stern, ensuring smooth entry into the water. The design of the bow means that the hull will ‘pierce’ the water, ensuring that wave resistance is reduced.Per Egil Vedlog, Rolls-Royce, Design Manager, commented: ‘We are pleased to receive this patent because it represents a benchmark for quality and legal protection. This patented technology will be highly relevant for shipowners looking to improve the ef�ciency of cargo ships operating along coastlines and inland waterways where it is most important to reduce fuel consumption and emissions.’

DNV GL and MPA engage on ‘Green Ports’ projectSINGAPORE _______________________________________________

DNV GL and the Maritime and Port Authority of Singapore (MPA) have signed a Memorandum of Understanding (MoU) which is intended to promote research and development in the maritime industry.

The focus of the collaboration will be on innovation, in particular with regards to risk assessment and safety guidelines on the use of lique�ed natural gas (LNG). The partnership will look at initiating a simulation study as well as training.

A further initiative will be the ‘Green Ports’ project, which will examine the potential environmental gains which can be made through energy savings and emission reduction technologies in ports.

Dr Henrik Madsen, DNV GL’s Group President and Chief Executive Of�cer, said: ‘Singapore has emerged as one of the key centres for innovation in the shipping world, especially in terms of promoting technologies

and systems which develop and promote green outcomes.

‘We have built up a relationship with the MPA over the past several years, as we have both jointly and separately championed projects which have sought to reduce emissions and improve fuel ef�ciency in shipping, and this MoU will help us to further our relationship.

‘Indeed, the MoU is a re�ection of the emphasis we place on innovation and R&D at DNV GL. We are making a signi�cant and sustained group-wide commitment by investing in the future of our industry. We will continue to invest around 5% of annual revenue to R&D, with one �fth of that marked for long term projects with a transformative effect, and have hubs of innovation around the world. This is at the heart of our goal of making the industry safer, smarter and greener,’ concluded Dr Madsen.

Official opening of Jurong LNG terminalSINGAPORE _______________________________________________

Prime Minister Lee Hsien Loong has of�cially opened Singapore’s Jurong Island lique�ed natural gas (LNG) terminal.

The S$1.7 billion ($1.3 billion) terminal began operations in May last year and some 18 LNG vessels have since called at the facility. The LNG, from BG Group’s portfolio, has been supplied from a number of sources, including Equatorial Guinea and Trinidad and Tobago.

The facility, which is designed to serve multiple terminal users, has the potential to support the growth of Singapore’s LNG sector services, including LNG trading and bunkering.

A third tank and additional regasi�cation

facilities are now operational at the terminal, increasing the throughput capacity to 6 million tonnes per annum (Mtpa). A secondary jetty is slated for completion by the end of March.

Plans are also underway for phase three at the terminal, which will see the addition of a fourth tank and more facilities to bring throughput capacity to at least 9 Mtpa. Singapore LNG has now started the tender process to select a suitably quali�ed contractor and a �nal investment decision, including the award of the Engineering, Procurement and Construction (EPC) contract, is expected to be announced in the second quarter of 2014.

Deal inked for tri-fuel tankersJAPAN ____________________________________________________

Tokyo LNG Tanker Company has signed a contract for the construction of two tri-fuel lique�ed natural gas (LNG) carriers with Japan Marine United Corporation.

The vessels will have a tank capacity of 165,000 cubic metres (m³) and will be used for transporting LNG, mainly from the United States Cove Point Project. The tankers will be equipped with tri-fuel diesel electric (TFDE) propulsion systems, enabling them to run on

either low sulphur fuel oil or gas.Each vessel is to be designed with what

the company claims to be the world’s lowest boil off rate (0.08%/day). Delivery of the vessels is slated for 2017.

Ship management will be handled by MOL and NYK respectively, following a deal signed between the companies and Tokyo LNG Tanker regarding joint ownership and a 20-year time charter agreement.

news asia pacific



news in briefHONG KONG ______________Sulphur controlsA new regulation has been approved by the Legislative Council of Hong Kong to introduce regulatory control on the quality of marine light diesel (MLD).The Air Pollution Control Regulation, which aims to help reduce emissions from local vessels, will take effect from 1 April 2014. Under its terms, any person who supplies non-compliant MLD could face a �ne of up to HKD$50,000 ($6,445) and a jail term of up to three months.Secretary for the Environment Wong Kam-sing said that the regulation would help improve ambient air quality and reduce health risks.‘The regulation provides for the speci�-cations of the locally supplied MLD, which includes a 0.05% sulphur limit, i.e. a 90% reduction from the current content of about 0.5%,’ he said. ‘Vessels operating on 0.05% MLD emit about 90% less SO2 and 30% less RSPs than those operating on 0.5% sulphur diesel,’ he said.

Brightoil goes on the acquisition trailHONG KONG ______________________________________________

As widely anticipated, Brightoil has boosted its Chinese presence with the $1.08 billion purchase of Anadarko Petroleum Corp.’s China unit.

The purchase of the Anadarko operation, known as Kerr-McGee China Petroleum Ltd, will ful�l Brightoil’s strategic ambitions to secure an upstream opportunity in the Chinese market. This latest move will give Brightoil access to oil and gas producing �elds in Bohai Bay in northeast China.

Kerr-McGee China Petroleum Ltd reported a net pro�t after tax of $80.1 million for �scal year ended 31 December 2013. Boci Asia acted as �nancial adviser to Brightoil on the transaction.

An improvement in its bunkering operations also contributed to Brightoil’s net pro�ts HK$544.9 million ($70.3 million) for the six months ending December 2013 – a stark contrast to the reported net loss of HK$871.2 million ($112.3 million) for the same period in 2012.

Releasing its interim results, Brightoil said that the turnaround to pro�t was primarily due

to the improvement of a few business sectors including a signi�cant contribution from its international trading and bunkering (ITB) sector.

It also drew attention to the successful implementation of operating cost reduction measures across the group in general, and the improvement in shipping business.

The company revealed an operating pro�t for the ITB operation of HK$480.6 million ($62 million) for the six months ending December 2013. This was in comparison to a loss of HK$791.1 million ($102 million) during the same period the year previous.

ITB’s total bunker sales volume for the period under review was 26% below the volume for the same period in �nancial year 2012, but saw an 18% improvement compared to the �rst half of �nancial year 2013.

The company commented that it plans to continue with its strategy to expand its bunkering presence in China by venturing into more Chinese ports, and will look to reduce its dependency on third party barges, focusing its efforts on moving oil onto its own bunker barges to its customers.

news asia pacific



news in briefLIBERIA __________________Registry launches new appA new mobile application has been launched which enables round-the-clock interaction with the Liberian Registry.Features of the ‘FlagState App’ include up-to-the-minute news and developments and a comprehensive global maritime events calendar.Users can also utilise the app to verify the authenticity of certi�cates and documents for Liberian-�agged ships, and validate seafarer credentials.Allison Williams, Communications & Research Manager at the Liberian Interna-tional Ship & Corporate Registry, the US-based manager of the Liberian Registry, commented: ‘The demand for instant access to important information in the shipping industry has never been greater than it is today. New technology means that there is no longer any need to be out of touch with developing news and events, wherever you are in the world. Liberia is dedicated to harnessing that technology for the bene�t of its clients, and the FlagState App is a perfect demonstration of its commitment in that regard.’

GHANA___________________Price upswingIn March there were reports that a fall in Ghanaian currency had an adverse effect on the price of marine gasoil (MGO).A reduction in the value of the Ghanaian Cedi has reportedly seen the price of MGO increase by over 6% per litre. A spokesman at the National Oil Authority said: ‘When you look at the crude oil price as we do, we always have to come back and look at the product prices because actually all our importers go out to buy re�ned products. Crude is a necessary benchmark but chief is the price of the re�ned product itself.’

MAURITIUS _______________Fuel supplyVivo Energy Mauritius is now offering 380 centistoke (cst) fuel oil at Port-Louis.The company says that the product will be available at berth and at anchorage, and with this offering Port-Louis becomes the sole location to offer 380 cst in the south western part of the Indian Ocean, on the Asia/Australia-West Africa/Latin America route.

news africa & mideast


Dubai moves ahead on environmental maritime initiativesUNITED ARAB EMIRATES ____________________________________

A new initiative has been launched to promote the sustained growth of the maritime industry in Dubai.

The Dubai Maritime Sustainability Program (MSP), introduced by Dubai Maritime City Authority (DMCA) in collaboration with the Dubai Supreme Council of Energy and DP World, is focused on understanding the impact of shipping on the environment. The initiative has been billed as an extension of Dubai’s government vision for sustainable growth across all economic sectors.

Describing the programme, H E Sultan Bin Sulayem, Chairman of Ports, Customs and Free Zone Corporation, and President of Dubai Maritime City Authority, said: ‘The MSP initiative is targeted at strengthening the United Arab Emirate’s (UAE) maritime industry and will complement the larger Dubai Maritime Sector Strategy.

‘By adopting practical steps to undertake

some of the sector’s greatest challenges relating to social and environmental performance, DMCA’s new initiatives, along with the schemes that are already in place, will promote sustained growth of the shipping industry and ensure that it continues to play a valuable role in the nation’s economy.’

DMCA says that the groundwork for MSP was initiated with the launch of the Sulphur Oxide Emission Reduction Campaign for Ocean Going Vessels (OGV) in 2011, and subsequently the Traf�c Separation Scheme (TSS) in 2012. The TSS program, for example, was developed to enable more ef�cient management of feeder approaches to the port, and a more transparent process for ship routeing.

DMCA says that several new modules, implemented in coordination with public and private sector partners, will be added to the MSP throughout the next �ve years.

CAP set to develop Port of DuqmOMAN ____________________________________________________

Consortium Antwerp Port (CAP) has signed a concession agreement with the Sultanate of Oman to run the Port of Duqm for the next 28 years.

This agreement follows on from an initial agreement between the Omani government and CAP signed back in 2009. At that point the development of the Port of Duqm had not been completed and CAP was responsible for the supervision of the �nal infrastructure works undertaken by the Consortium C.C.C. /STFA and Jan De Nul (Belgium).

CAP’s goal is to develop the Port of Duqm as a hub, with special emphasis on oil and gas. The involvement of Antwerp-based companies in the development of the port will also improve the position of Antwerp as the main gateway for petrochemicals from the Middle East.

Over the last decade Antwerp has become the leading hub for the fast-growing chemicals export market in Europe (from 2.8 million tonnes in 2002 to 7.8 million tonnes in 2012), and the European port’s market share has risen from 10% to 24%.

Total Lubmarine extends product rangeMID EAST _________________________________________________

Total Lubmarine is expanding the availability of its products at the ports of Tripoli and Beirut.

Total Lubmarine’s cylinder, trunk piston engine and system oils, including the Atlanta, Aurelia and Talusia range, are now available at the ports.

The marine lubricants provider says the decision to increase availability is due to a signi�cant increase in the region’s shipping activity during the last two years.

Andrew Knox, Commercial Director, Middle East at Total Lubmarine, said: ‘By

expanding our product availability to Lebanon at the ports of Tripoli and Beirut, Total Lubmarine is now well positioned to take advantage of the opportunities offered by the country’s burgeoning shipping industry.

‘Already we provide marine lubricants at more than 1,000 ports in 100 countries, offering wider product availability than any other provider. This latest expansion means Total Lubmarine can support new and existing customers as they look to increase trade on emerging Middle Eastern shipping routes.’


Most of the world’s bunker quotations, and sale and payment transactions, now take place electronically. An email arrives, sometimes from a customer the trader believes

he or she knows, but often not. The email requests a quote, and the trader uses the email address on the customer’s (or supposed customer’s) email to quote back, including (following best practices) the trader’s sales terms and conditions. An email returns accepting the quote, and the trader emails back a stem (again incorporating sales terms and conditions) and also con�rms the purchase with a physical supplier, who also emails back con�rmation incorporating its own sales terms and conditions. The bunkers are loaded, the trader emails an invoice with wire payment instructions, and the physical supplier also emails the trader wire payment instructions.

Throughout this process there are at least eight email communi-cations, three of which confirm contractual sales conditions, and two of which transmit bank account wire information. Some are only text with graphics, others have text with .pdf attachments, including invoices, loading receipts or testing results.

Those in the bunkering industry execute literally thousands of transactions like this each day. But aside from the traders, customers and physical suppliers themselves, how many people are involved with, and could have access to, these transactions?

The answer is thousands, if not more. Before reaching the intended recipient, an email travels across a

Cyber hackers are targeting the bunker industry – and the financial implications can be huge. Steve Simms offers a counter-offensive to this growing threat

Safe house

cybercrime



variety of public servers and can be intercepted at any point. The use of web-based access to emails, for off-network and out of of�ce email access typically needed by travelling employees, further increases interception possibilities.

In our worldwide legal practice representing bunker suppliers, brokers and traders, we have seen increasing numbers of criminals gaining access to bunker suppliers’, brokers’ and traders’ electronic communications. These criminals know how the bunker industry works, they use the language and means of communi-cation familiar to the industry, and they are adept at intercepting communications, creating fake email accounts, modifying .pdf documents, and forging invoices and receipts.

Because of the industry knowledge they demonstrate, we believe that many may have at one time worked in an area of the bunkering industry. Insiders still in the industry, such as lower level personnel with access to email, customer and bank account information, may also be assisting them. They target particular transactions, where they seem to know that the supplier, broker or trader, or their customer, may not be attentive to changes of bank account, email or other information.

In rare instances, bunker suppliers, brokers and traders detect the potential crime before it happens – perhaps via their customers who receive what seem to be out-of-ordinary documents and emails. More often, however, the crime is uncovered after the bunker parties involved have wired funds to a �ctitious bank account which the criminal has set up in the broker’s, supplier’s or trader’s name. Only then will email exchanges be examined and the subtle email address changes and modi�ed documents picked up.

The bunker supplier, broker or trader, or customer who fall victim to this electronic theft may lose a signi�cant amount of money. The criminal theft of individuals’ credit card information by hacking or internet web site ‘phishing’ is well known, but given typical card credit limits, the monetary losses are relatively low. The credit card industry itself has also created elaborate security approaches to deter fraud. This is not the case with most bunker suppliers, brokers, traders or their customers who undertake enquiries and transactions via unsecured and unencrypted email and then send wires to accounts which those unsecure emails have speci�ed.

Many bunker suppliers, traders, brokers and their customers could be seen as ‘low hanging fruit’ for cyber criminals. Diverting just one wire concerning a bunker transaction can instantly net an on-line criminal hundreds

of thousands of dollars with little chance of detection. The magnitude of gain from such criminal diversion also leaves ample funds for incentive payments to lower level personnel in the bunker industry who have access to sensitive electronic information and for whom such payment may well exceed their honestly-earned pay.

The embarrassment over the discovery of such criminal fraud can also prevent reporting to authorities, which further emboldens the criminals. The fraud, once discovered, is usually one that, had there been more careful oversight of emails, could have been discovered. Questions are then raised over who is responsible and what should be done about it.

Reporting to authorities could bring investigators into a company to inspect its electronic systems and perhaps look into areas that the company would prefer to keep private. Then, there is the question of how to replace the stolen funds. If the customer has paid on fraudulent wire advice, generated arguably because of a broker’s, trader’s or supplier’s lack of diligence, must the customer pay twice, once to the criminal and again to the real seller? Even if the customer, reluctantly, pays (again) into a genuine account, he is unlikely to engage in repeat business.

Let’s now look at three types of electronic theft – or attempted theft – which our bunker clients have been subjected to. Some resulted in the theft of hundreds of thousands of dollars, never to be recovered, and others, with our intervention, were detected before they could occur.

In one example, the trader con�rmed a stem and then placed a delivery order with a physical supplier. The physical supplier was one who the trader did not ordinarily use, but who offered a below market price for the delivery. The physical supplier provided bunkers to the customer’s vessel, and the trader received an emailed invoice which appeared to be from the physical supplier. As he had done hundreds of times before,

the trader forwarded the emailed invoice to the trader’s book-keeping staff, who quickly executed a wire to the instructions from the supposed physical supplier. Not long afterwards, the trader received another email from the physical supplier – this was a genuine one with an invoice attached which stated the supplier’s real wire information. The supplier identi�ed the �rst wire instructions as fraudulent; the trader protested against paying again to the supplier’s authentic account. The supplier threatened to arrest the customer’s ship for non-payment. Reluctantly, the trader paid (again).

In another situation, the broker completed the delivery to the customer though the physical supplier. Again using email, the broker emailed an invoice to the physical supplier, including wiring information for payment. A criminal intercepted the email and forged a ‘corrected’ invoice (appearing in layout and design almost identical to the authentic invoice) which stated ‘new’ wiring instructions, and in a covering email, with an address almost identical to the broker’s, even offered a discount for immediate payment to the ‘corrected’ invoice details. The customer, however, sensed something amiss and contacted the broker who immediately uncovered the fraud. The customer made one payment, to the broker’s correct account (without even expecting the ‘discount’!).

In our third example, the supplier was involved in a quality dispute with the customer and the customer refused to pay. This resulted in lengthy email exchanges, including detailed testing information and each side’s position on the claims. Finally, the supplier and the customer agreed to settle the dispute, and the supplier emailed the customer with a letter in .pdf format including the imaged, physical signature of the supplier’s managing director, stating the settlement terms and wiring instructions for the settlement amount. The customer insists that it never received this email.

Instead, the customer received a

‘These criminals know how the bunker industry works, they use the language and means of communication familiar to the industry, and they are adept at intercepting communications’

cybercrime



forged letter, which included an image of the managing director’s signature, stating a fraudulent bank account opened in the supplier’s name. The customer signed the letter to acknowledge settlement, wired funds to the fraudulent bank account, and then returned the signed/acknowledged letter, imaged in .pdf, by email to what it thought was the supplier’s email address. The supplier then received a copy of its authentic letter (with authentic wiring instructions) and the customer’s imaged acknowledging signature. The supplier, however, never received the wired settlement funds (which went to a fraudulently-opened account).

The supplier learned of the fraud when it contacted the customer about the missing funds – and the customer sent the forged letter. An examination of emails showed slight alterations of some of the ‘cc’ copies of the emails. Evidently, the criminals (with apparent ‘inside’ assistance) had opened fraudulent, similar email accounts to the customer’s account. They intercepted the supplier’s letter, altered it (leaving the managing director’s signature), and then sent that on to the customer who returned its letter to a fraudulent email similar to the supplier’s.

The criminals then transferred the customer signature to the original supplier letter, and, using an email address similar to the customer’s, returned what the supplier thought was its original letter, with an acknowledgment. The supplier contacted the bank where the criminals had opened the fraudulent account. The criminals, who had presented documents showing that they were the supplier’s of�cers, opened the account. The intercepted wire was for $200,000. In conclusion, only $500 remained in the account; the criminals were long gone, and the supplier and customer were left to contend, once again, over payment – above and beyond the original quality dispute.

In each of these situations, diligence could have stopped the problem. There also was a question about whether to report to the authorities (no report ever has resulted in successful prosecution). In addition, there was a signi�cant loss of funds, except for one customer’s vigilance in one situation, and legitimate questions were also raised about whether a company insider had facilitated part of the theft. Decisions had also to be taken as to whether other customers should be noti�ed of the scams, in case the criminals (having knowledge of the client’s operations) targeted other transactions with the client’s customers.

How can you then take steps to ensure that your company does not fall prey

to electronically-based criminal theft?Consider using email encryption with

digital signature for transmitting quotes, receiving all confirmations, and sending invoices. This is the only way to safely take advantage of secure email communication with customers, partners and employees, and there are a number of email encryption programs available which enable authen-tication of emails and provide assurance that the emails reach and are read by the person(s) you are sending them to.

A further bene�t of using these programs is that they provide evidence admissible in court or arbitration that your correspondent actually has received the transmission. Often, disputes over whether a bunker supply incorporates sales terms and conditions, or whether the supplier has received ‘no lien’ notice, turns on proof that emailed incorporated terms and conditions, or the terms referring to those sales terms, actually reached the customer. Email encryption programs provide means that courts and arbitrators should recognise, con�rming that you have sent your terms and that your customer has received them. They will also provide you with a better defence against customers who

later claim that they have responded with acceptances which negate your sales terms. We have seen such responses intentionally directed to lower-level employees, who do not know to report the responses. The responses are raised later, of course, as reason for non-payment or non-compliance with terms for payment or for reporting supposed quality or quantity disputes.

You should also include in your sales terms and conditions express terms for payment, which should include speci�c bank account wiring information. Although this may initially seem to be offering ‘private’ information, your banking information will be well known within any customer or supplier organisation you have done any business with, as well as to their bank. It is up to your bank to ensure that no one, with that information, withdraws your funds without authorisation (and the bank is liable to you if they do). Post your sales terms and conditions on your website, and in your sale con�rmation and invoices. You should also ensure, of course, that you are using a web provider with adequate security against hackers and who will report back to you quickly about any attempts to modify the website.

Your sales terms and conditions should state expressly that there must be no other payment than by wire to the speci�c account which your sales terms and conditions specify. You should repeat this both in your stem and in all of your invoices (always remembering that criminals may forge your invoice, as explained above).

Make sure that educate yourself and your employees to spot potential frauds. Look for email addresses or signatures which appear different from known customer emails. A ‘spoofer’ will write an email appearing to be from an authentic source (perhaps after intercepting a prior email), attempting to gain a response which will reveal information about your mail system and business style. This may be, for example, by way of a request from what seems to be a potential customer, with which you have never done business.

Essentially, train your employees and yourself to be suspicious, particularly at the critical time when the customer wires funds to you, or when you wire funds to a supplier. Not only con�rm the wire instructions for your wire receipt, or the address to which you’re wiring, but also con�rm the identity of the person with whom you are con�rming the instructions. Keep in mind that not only are emails ‘spoofed’, but that telephone numbers, through ‘voice over internet protocol’, can be hijacked too.

Consider engaging a security and legal audit of your quotation, stem, invoicing,

‘A further benefit of using these email encryption programs is that they provide evidence admissible in court or arbitration that your correspondent actually has received the transmission’

cybercrime



and wire transfer and receipt systems. Cyber criminals are very determined: Norton, the Internet security company, has estimated that cyber criminals steal from one million people each day, and stole from 431 million people in the past year, with an extraordinary $114 billion either stolen or spent on prosecuting cybercrime in 2013 (these statistics can be found at http://uk.nor ton.com/cybercrimereport).

A legal and security audit will also help identify internal information �ows, which may tempt employees to be part of criminal

schemes resulting in electronically-facilitated theft. It will further evaluate your sales terms and procedures for security and enforceability if there is a fraud. Such an audit can include an educational programme for you and your employees about how to detect and deter electronic commerce fraud. Our law �rm does, and your insurers may, provide services for such a legal audit and educational programme.

If your company is the victim or attempted victim of an electronic fraud, engage competent legal counsel immediately. That counsel can advise about a proper response,

including how to secure your computer systems and preserve evidence of breach, and about how to detect the source of the theft. Legal counsel also can advise about how to recover funds which have been stolen, including any grounds for claim against a bank which has opened an account to receive a fraudulently-directed wired, or an internet service provider (ISP) which has facilitated the opening of a fraudulent internet email account. Legal counsel also can advise how (and whether) to notify law enforcement of�cials, and how to notify those customers (and potential customers) which criminals may also be targeting about the fraud and avoiding the fraud. They can also advise on whether a customer who has wired funds to a fraudulent account must still wire funds to your authentic account (and double pay).

There are many legal systems which may be involved in the question of how to respond to a cyber fraud involving payments for a bunker supply, and some may con�ict. Competent legal counsel can help sort through those many legal systems to �gure out how to respond, and recover from a fraud.

Of course, an investment for prevention is worth far more for a cure. Signi�cant electron-ically-related fraud is occurring in the bunker industry and, given the international nature of this sector and the frequency and size of transactions involved, it is certain to escalate.

In the early 1930s, during the Depression in the United States, there was a pair of celebrated bank robbers, Clyde Barrow and Bonnie Parker. ‘Bonnie and Clyde’, like the pirates of the Maersk Alabama, even had a movie made about them. While there may never be a movie made about cybercrime and the bunker industry, these criminals and Clyde Barrow do have something in common. After his capture, someone asked Barrow, ‘why do you rob banks?’ He responded: ‘because that’s where the money is.’

Make sure cyber criminals don’t see your company as ‘where the money is’. As this article outlines, you can take a number of relatively straightforward measures to safeguard your business from prying ‘cyber’ eyes.

Suppliers of IFO’s and MGO. Your South Atlantic fuelling station for Bunker Fuels to cruise, � shing, oil exploration and

research vessels. Available by pipeline at dockside and by tanker-barge. Marine lubricants also supplied.

Stanley Services LtdPort Stanley, Falkland Islands, South Atlantic Ocean

Phone: 500-22622 | Fax: 500-22623Email: [email protected]

Port Stanley, Falkland Islands, South Atlantic Ocean

STANLEY SERVICES LTD

Steve Simms is a Principal of Simms Showers LLP. Simms Showers LLP provides customised legal services in the areas of vessel arrest, attachment, bunkers quality and quantity disputes, as well as cybersecurity, to bunker suppliers, traders and brokers worldwide

Email: [email protected] Tel: +1 410 783 5795

‘More often, however, the crime is uncovered after the bunker parties involved have wired funds to a fictitious bank account which the criminal has set up in the broker’s, supplier’s or trader’s name’

cybercrime


http://uk.norton.com/cybercrimereport




Lique�ed natural gas (LNG) is emerging as the fuel for the future of high horsepower engines; it is clean, it is

abundant, and it is economical.In North America, two main factors

are setting the stage for LNG to be a major fuel source for the marine industry.

First, there are the increasing limits on sulphur emissions in order to comply with the requirements under MARPOL Annex VI and the decision of the United States and Canada to create an Emission Control Area (ECA) – that is, a decision to work with the Interna-tional Maritime Organization (IMO) and the International Convention for the Prevention of Pollution from Ships (MARPOL) to maintain and enforce more stringent emissions standards for ships operating in the waters off their coasts.

In August 2012, the United States and Canada came together as the North American ECA, putting stricter limits on maritime emissions of nitrogen oxide (NOx), particulate matter (PM), and sulphur oxide (SOx). On 1 January 2014, the United States Caribbean ECA, which covers parts of the waters around Puerto Rico and the US Virgin Islands, also came into effect. Using LNG as a marine fuel is one of the ways a ship operator can meet these reduced emissions requirements.

The United States Coast Guard (USCG) is quickly getting onboard with LNG bunkering. In mid-February it released a pair of draft policies on the subject, available to the public, with the purpose of educating those seeking to fuel their vessels with LNG. The draft policies cover areas such as fuel transfer operations, training of vessel personnel, safety, security and risk assessment, and other measures for both bunkering facilities and vessels.

In a study conducted by LNG America, it was determined that one of the shipping industry’s major resistance factors to a switch to LNG was an uncertainty over the availability of LNG as a bunker fuel.

However, below the surface of the earth, a dramatic change is taking place which is enabling LNG to be a serious contender for the marine fuel market, particularly in North America.

Through the application of horizontal drilling and hydraulic fracturing, vast, previously untapped reserves of shale gas located under large tracts of the North American continent have been unlocked. The paradigm shift in North American shale gas development has removed much of the exploration risk from the industry and converted the resource development into something more akin to coal mining, where the focus is on

ef�ciency improvements and cost control. The technology change has shifted the gas supply curve outward, creating a new equilibrium which provides for sustainable production at moderate price levels.

North America is now on track to become a signi�cant exporter of LNG towards the end of 2015 with Cheniere’s Sabine Pass LNG production facility currently under construction in Cameron Parish, Louisiana. A number of other large-scale export projects have also been announced for the US Gulf Coast.

With the North American ECA mandating reduced marine emissions, the shale gas revolution providing abundant natural gas reserves, and the construction of large-scale

LNG production facilities on the US Gulf Coast, the stage is set for LNG to become a major component of the North American marine fuel mix. Furthermore, North America is poised to become a major pillar in the global LNG bunker infrastructure, which will eventually grow to see all major international ports having LNG supply for the global shipping industry.

At present, the largest class of cargo ships in the world travel to either Rotterdam or Singapore to �ll up on fuel. However, the sheer amount of natural gas available in the United States is now giving the country the sort of economic

advantage it hasn’t enjoyed in decades. For the maritime industry, it is also a

means to gain a competitive edge while complying with ECA emissions limits.

For natural gas to become a marine fuel in the form of LNG, the two major industries – natural gas and shipping – have to come together with each side doing its part. At LNG America, we are addressing the natural gas side of the equation.

When it comes to building the LNG marine fuelling infrastructure for the North American shipping industry, LNG America will initially be focused on the US Gulf Coast, which is home to nine of the top �fteen busiest ports in the United States, as well as the Port of

LNG America is designing a ‘hub and spoke’ architecture for the distribution of LNG to the major US Gulf Coast ports. CEO Keith Meyer explains the company’s vision

Mission statement

‘When it comes to building the LNG marine fuelling infrastructure for the North American shipping industry, LNG America will initially be focused on the US Gulf Coast’

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Houston which is the number one bunker port in the country. The US Gulf Coast is also the epicentre of the US LNG supply movement with Cheniere’s Sabine Pass liquefaction facility leading the way – earlier this year the facility passed the midway point in its construction.

LNG America is designing a ‘hub and spoke’ architecture for the distribution of LNG to the major US Gulf Coast ports. The initial primary supply source will be Sabine Pass; shuttle barges will be the ‘spokes’, and these will deliver LNG to strategically located storage terminals at or near major port locations. From there, the LNG storage terminals will serve several purposes, including supply to bunker barges (which are also being commissioned by LNG America), and as fuelling depots for tugs, towboats, and other high horsepower marine craft. Some storage facilities will also serve as locations where tanker trucks or ISO containers may be �lled.

We have now engaged a marine architect to design the vessels that will serve as shuttle/bunker barges, with a target delivery date at the end of 2015. We are also assembling a team of parties to shepherd this effort along its development path. The team will eventually include a cryogenic tank supplier, a cryogenic topsides expert, a classi�cation society, a

shipyard, a towboat/bunker operator, and others, all working together towards the common goal of placing the �rst North American LNG bunker barges into safe and reliable operation. We expect the vessels and the accompanying procedures and LNG bunkering protocol to help shape the standard of an industry with a vibrant future.

One of LNG America’s primary missions is to provide the necessary ‘time and place utility’ to the shipping industry – that is, providing LNG bunker fuel where it is needed, when it is needed, and in the quantities needed, all at a competitive price. Our initial game plan is focused on the US Gulf Coast, but we are also looking at the other major port locations on the East and West coasts and seeing how we can facilitate the growth of the industry.

The management team of LNG America has an appreciable history in LNG supply and infrastructure development. Our existing LNG knowledge base, combined with our developing core competency in small-scale LNG marine movement, storage, and bunkering, makes LNG America an ideal partner for companies wanting to participate in the growth of a new industry. Similarly, we see signi�cant bene�ts in having the serious players in the emerging industry engaging

in cooperation to ensure a safe and reliable industry. Our duty as an industry will be to serve the global shipping industry while also respecting and preserving the long and safe track record of the global LNG industry.

The shipping industry has seen its means of propulsion change before – from wind, to wood and coal-�red steam, to oil direct drive, and now diesel electric and even turbines. A move to natural gas will most likely involve a transition using dual-fuel units at �rst, but then, eventually, a fully optimised natural gas-powered vessel may become the industry standard.

With a cooperative effort, we can build a strong and stable bridge between the natural gas industry and the global shipping industry. The bridge cannot be built by one company alone, but rather will require the efforts of hundreds of companies, from tank and �tting suppliers and engine manufacturers, to the world’s largest shipbuilders. At LNG America, we are proud to be doing our part to help North America become a major LNG fuel provider.

Keith Meyer CEO LNG America LLC

Web: www.LNGAmerica.com

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http://www.LNGAmerica.com


Despite a growing industry acknowl-edgement of the bene�ts which lique�ed natural gas (LNG) as a

marine fuel can offer, many companies can still be found recycling the now somewhat clichéd ‘chicken and egg’ arguments, rather than actively seeking to investigate, develop and promote the potential of LNG as a marine fuel and working to create an LNG supply and bunkering infrastructure.

Even more frustrating for those looking to move ahead, is that comparatively few companies have yet taken the plunge to either retro�t, or to order LNG-powered vessels. However, there are some companies who �rmly believe in the new fuel.

Bunkerspot caught up with Ed de Jong, Business Development Officer at Deen Shipping, whose vessel, the Argonon, is now fully operational using marine LNG to propel it through the inland waterways of Europe.

A key dilemma facing those wishing to invest in the construction of LNG-powered vessels may be that the cost of doing so now, when LNG propulsion is in its relative infancy, may be considerably higher than making that capital expenditure commitment several years down the line.

Being at the forefront of a movement often means exposure to higher costs, and there may well be technological and regulatory hurdles

to clear. However, such potential obstacles did not dissuade Deen Shipping’s founder, Gerard Deen, who, while at a conference for inland shipping, made a clear decision.

As Ed de Jong explained: ‘Mr Deen was at a conference where cleaner ships and the tighter regulations were being discussed, along with the fact that engine manufacturers could not cope with the incoming restrictions on emissions.

‘Having heard the debate fully, Mr Deen contemplated that if the engine builders couldn’t cope, then what was the solution?

‘He calculated that there were two options. Number one – invest in after treatment technologies, such as scrubbers. Or number two – find a cleaner fuel.’

As Ed de Jong explained, Gerard Deen believed that those companies which opted for after-treatment technology were not, in fact, solving the issue; they were merely stepping sideways and dealing with a problem, rather than facing it head on.

Following investigations into the viability of using LNG as a marine fuel, the company pressed ahead with developing a vessel to run on this ‘new’ fuel. However, as the company began to put together a detailed business case for a switch to LNG, the �nancial landscape changed signi�cantly.

Ed de Jong took up the story:

‘When Gerard Deen started the investi-gations into the feasibility of LNG, marine gasoil (MGO) and LNG were almost at the same price level, so there were no operational expenditure (OPEX) problems.

‘But gradually, MGO became more and more expensive, while LNG remained stable. This spread between the two fuels made LNG more �nancially viable, especially with regards to the energy content, than Mr Deen had �rst envisaged.’

Deciding to go ahead with an innovative project is one thing, investing heavily in it is another, but ensuring that it works, operationally and commer-cially, is a different matter altogether.

As well as ensuring that LNG could produce the requisite energy content, the volatile nature of the compressed gas, as well as the associated temperature consid-erations, meant that several key technology elements had to be put in place before the Argonon project could become a reality.

‘It was a three-year challenge. It was really dif�cult as the gas is dangerously explosive, so you can well imagine the problems with its use on an inland tanker. We had to win a lot of people over in order to produce the technology to store the gas,’ said Ed de Jong

‘However, for all its potential dangers, natural gas behaves entirely differently when you cool it to -162oC. It is the safest fuel, for when you spill it [LNG], it will vapourise instantly.

‘Despite the safety aspects, we still proceeded to offer extensive training for all our crew members. All our personnel are trained to function on a chemical tanker, anyway, meaning they are used to handling dangerous cargo and goods,’ Ed de Jong continued.

‘Using this experience, we developed extra training in order to ensure they were capable of dealing with LNG and cryogenic fluids. This consisted of a hands-on operational trial day, where LNG would be

Innovative solutions invariably require market ‘pioneers’ to prove their viability. Sam Lowrey spoke to Ed de Jong about Deen Shipping’s commitment to LNG

Proof positive

‘It was a three-year challenge...We had to win a lot of people over in order to produce the technology to store the gas’

LNG



replaced with nitrogen’ [nitrogen is just as cold, but posed no direct operational issues].

Having overcome the initial obstacles, Deen Shipping then had to tackle the problem of access to an LNG bunkering infrastructure. Currently, Europe’s inland waterways do not offer a ‘joined-up’ and �xed network of LNG supply, and it is the current absence of this infrastructure – and therefore security of supply – which has deterred some shipowners from making an investment in LNG.

However, Deen Shipping provided its own solution. Ed de Jong explained: ‘We have encountered no problems with bunkering because we have our own supply, having established our own company, called LNG Bunkering. In doing so, we became the first company to bunker LNG in northern Europe by truck.’

Despite this, the company has found there can be problems in bunkering by truck. From placing an order for LNG, we have to �x a slot three days beforehand, which can present an operational stumbling block given that the company doesn’t always know where the Argonon will be on any given day.

Ed de Jong continued: ‘While we are coping with bunkering, the ideal situation would be to develop more bunkering stations along the waterways as, right now, I could not tell you where our vessel will be tomorrow. Logistically, it is dif�cult.

‘Even though this is a problem, having our own supply means that we do not encounter

any quality issues with the fuel. We get our fuel from Zeebrugge, from one of the capacity holders that we have a contract with, which, in turn, has a contract with only one source. This is a Qatari company, so we know we will only receive a good quality product.’

The ability to establish a chain of quality supply is a further concern; many major gas companies are not used to the marine fuels industry and how it works, but these businesses are, of course, an integral part in the supply of LNG. This is why Ed de Jong believes that traditional bunker suppliers will continue to play a key role in the provision of LNG as a marine fuel.

‘Shipowners will still negotiate with current bunker fuel suppliers because whether you are delivering diesel fuel or LNG, you need to be

in very good contact with the end customer. If you look at the sources of the LNG, while they may be big companies, they are not familiar in talking with an end customer.’

Deen Shipping has invested so much time, effort and money into the Argonon project, that it has clearly nailed its colours to the LNG mast. However, as the Argonon plies its trade, Ed de Jong remains a con�dent advocate of the bene�ts of LNG.

The adoption of scrubber technology was dismissed from the outset by Gerard Deen, and even with the emergence of alternative fuels such as methanol, the company’s faith in LNG is unwavering.

‘Methanol will not happen because the amount of heavy fuel oil in Rotterdam is around 11 million metric tonnes (mt)

‘The company has found there can be problems in bunkering by truck. From placing an order for LNG, we have to fix a slot three days beforehand, which can present an operational stumbling block’

LNG



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BUILT

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Miraj 2007 7,500

Al Mahfoza 2003 105,433

Al Mubarakah 1994 149,258

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a year, while inland barges will bunker close to 1 million tonnes. Methanol simply cannot cope with this demand.

‘Economically, LNG will only get cheaper. Its costs will fall because when there is more infrastructure in place and more availability, you will get more competitors, transportation logistics will be cheaper and demand will then increase.

‘If you have to decide your logistical costs over 100 companies or 100,000, then the price will obviously drop.’

Notwithstanding the concerns of LNG ‘doubters’, so often expressed at industry seminars and conferences, Deen Shipping has taken a decisive and pragmatic approach to the use of LNG as a bunker fuel, and Ed de Jong is equally positive about the outlook for LNG: ‘The demand will come, and it will be big. In my opinion, LNG is the only solution for both sea-going and inland vessels.’

Ed de Jong Business Development

Tel: +31 78 619 00 84 Email: [email protected] Web: www.deenshipping.com

Deen Shipping’s Argonon was built in collaboration with Pon Power, Shipyard Trico, Cryonorm Projects,

and the Centraal Bureau voor de Rijn (CBRB). The project received a subsidy from the European Fund for Local Development.

The construction of the hull was outsourced by Shipyard Trico to the Sainty Marine Shipyard in China. The keel laying took place in 2009 and vessel construction was completed in 2010.

The Argonon arrived at the Port of Rotterdam in March 2011 and the vessel was handed over to Deen Shipping at the end of that year. Its first LNG bunkering operation was undertaken at the Port of Antwerp in December 2012.

As of 19 March, the vessel had been in service for 845 days and was reported to have saved 339,879 kg of carbon dioxide (CO2) .

Argonon Shipping is a subsidiary of Deen Shipping which owns �ve vessels, including the Argonon, and manages a sixth ship in the Deen �eet. Two bunker barges at the ports of Rotterdam and Antwerp supply ocean-going

ships, while the other vessels transport mineral oils and distillates for re�neries.

Speci�cations:Capacity: 6,100 tonnes Length: 110 metresDouble hull: Y-ShapeRange: 800 km range (equivalent to the vessel’s round trip between Rotterdam and Basel)Propulsion: 2 x Caterpillar 3512 dual-fuel, 1521 BHP engines. These run on a mixture of 80% natural gas, 20% diesel. The engine can run entirely on diesel but not on LNG alone.Onboard system: 2 x 30kW Capstone microturbines (both fully powered by LNG) which are used for central heating and onboard electrical systemsLNG storage: A 40,000 litre Cryonorm Projects vacuum insulated stainless steel LNG storage tank.

Cryonorm also supplied the vacuum insulated bunker connections and an LNG vaporisation system.

The MTS Argonon – the first dual-fuelled inland bargeMTS Argonon – the first dual-fuelled inland bargeMTS Argonon

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LNG



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A s lique�ed natural gas (LNG) is increasingly acknowledged as a viable marine fuel, in terms of safe bunkering practices and emissions reduction characteristics, the next step in the

process is to address the issue of price.Currently cheaper than marine gasoil (MGO) in a

direct price comparison, achieving an industry consensus over how to price LNG is, at present, a challenging task.

Whilst there are regional �uctuations in the pricing of conventional marine fuels, determining benchmark prices for LNG as a marine fuel is very dif�cult, and, even if an LNG price can be determined as a commodity, this will bear little relation to its price as a marine fuel given the range of additional costs that have to be attributed to its provision.

A logical starting point might be how LNG is to be sold as a marine fuel – is it in terms of quantity or energy content?

Keith Meyer, CEO of LNG America, responds: ‘The short answer to a more complicated question is that we (the LNG and fuel Industries) will buy and sell energy.

‘It gets complicated because we meter volume and use volume or weight units to describe quantities in liquid form (i.e. gallons, litres, tonnes), but even with that – oil too – there is a sample taken so the buyer knows how much energy it is getting.’

The current general consensus seems to be that LNG will be priced in terms of its energy content, based on an individual quota due to the difference in energy content in each bunkering operation.

Regulations and supply structures governing the use of marine LNG are being implemented. However, as Sam Lowrey discusses, pricing LNG as a fuel is far less clear cut

Paying the price

LNG



However, while LNG might be priced based on energy, the fuel will still be handled and dealt with in terms of quantity.

For the maritime industry, the challenge in calculating a cost for LNG is a highly complicated one.

Firstly, a global price cannot be assumed, given the vast cost differential between regions. David Bull, a Senior Consultant at Ocean Shipping Consultants, explained. ‘The United States has by far and away the cheapest price for LNG, with Far East Asia being the most expensive. The European market sits somewhere in the middle.

‘I don’t believe that there will be a standard global price, however there is the real possibility that there could be a situation where there are three standard prices.’

These thoughts are echoed by another LNG industry expert, who told Bunkerspot that ‘there will always be a separate price for each region’.

The current disparity between the three regions could further be complicated, as David Bull believes that Singapore may decide to develop its own, separate pricing mechanism.

‘Singapore is the biggest bunkering hub in

the world and because of this it may choose to source its LNG from the Middle East. This will mean that it may develop a completely different rate to the rest of Far East Asia.’

Pricing LNG is not a single-track procedure and will require many separate issues to be taken into consideration. When a contractor provides a customer with a price, it will �rst of all depend on where the market currently ‘pegs’ the price of the fuel.

This means that the price of LNG could be dictated by which market it becomes ‘pegged to’. However, as the LNG industry expert suggested, it doesn’t matter which market the gas is pegged to; it doesn’t make a difference. What really matters to those supplying the fuel are pro�t margins weighed up against costs.

‘The supplier will ultimately decide on a price on an individual contract basis – how much margin do I want to make on this deal? What are the costs? How much is the customer willing to pay?’

The view that price will be dictated by individual suppliers is fast becoming the accepted opinion for LNG pricing. Simply put, every deal is different. Before a supplier decides a price to quote a customer there are

several factors which need to be considered.Ed de Jong, Business Development

Manager at Deen Shipping, which operates the world’s first inland LNG-fuelled barge, listed the many factors involved.

He detailed that storage, slot and handling fees, transportation type and costs (truck or inland/sea ship), volume, energy content, regularity of orders, point of delivery, supply line and insurance are all components in how an LNG price is calculated.

With each of the above factors having an effect on how LNG is to be priced, it is easy to understand the level of confusion with regards to a standard price. If all of the aforementioned factors bear an in�uence and every request is different, it is seemingly impossible to standardise the pricing.

However, this situation may change if demand meets supply, in what David Bull referred to as ‘critical mass’.

If this point is reached, it is conceivable that technology will have advanced concurrently, meaning a reduced cost for the supplier, which will in turn result in a cheaper price for the customer.

However, until the demand for LNG as a marine fuel soars, it is clear that all prices will be dealt with on an individual basis. There are simply too many different factors in play for a level price to be set.

Going forward, upcoming emissions regulations will force the maritime industry to confront the issue of LNG pricing, and in an industry dominated by close margins, it may not take long for participants to achieve a more stable consensus on price.

Sam Lowrey Bunkerspot reporter

Tel: +44 1295 814 455 Email: [email protected]

‘Storage, slot and handling fees, transportation type and costs, volume, energy content, regularity of orders, point of delivery, supply line and insurance are all components in how an LNG price is calculated’

avrv Landscape Terpel 19x6,5.pdf 1 7/24/13 6:45 PM

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They said it couldn’t be done. This was the key point that kept cropping up in a recent workshop in London hosted by Glycerine Fuel for Engines and Marine Sustainability

(GLEAMS), the group running the Technology Strategy Board-funded initiative looking into the use of glycerine as a marine fuel.

Glycerine is a by-product of the biofuel industry. It is a simple polyhydric alcohol; a colourless, odourless, liquid. Unlike diesel and heavy fuel oil (HFO), which are complex blends of hydrocarbon molecules, glycerine is a single chemical compound with a highly oxygenated structure.

It is widely used by the pharmaceutical and cosmetic industries but, despite their needs, there is still an oversupply of the substance in the global market.

Initially, it was widely thought that glycerine could not be burned in an engine. Some tried, some failed, and even major engine manufacturers, faced with the challenge, said it wasn’t possible.

Then in 2007, after years of experimentation, renewable energy development company Aquafuel Research announced it had pioneered a method to use glycerine as a fuel in its clean form in unmodi�ed compression ignition engines. The testing had been overseen by physicist John McNeil, and so the McNeil cycle was born.

Several years later, Aquafuel began discussions with Lloyd’s Register about using the technology for marine applications, having developed it for onshore applications and patented it. Another company, Marine South East, had also been talking to Lloyds Register about alternative fuels – and the parties joined forces. An application for funding was submitted to the Technology Strategy Board, which had recently issued a call for its Vessel Ef�ciency project.

‘We had been in ongoing discussions with Lloyd’s Register

Market researchNew research shows that glycerine has clear potential as a niche bunker fuel. Rebecca Byers finds out more

alternative fuels



about alternative fuels and we thought glycerine would be a good project for the Technology Strategy Board competition,’ explained Simon Powell, a project manager and founding member of Marine South East.

The project was subsequently approved for funding and GLEAMS was set up.

GLEAMS is a consortium comprising Marine South East, Aquafuel Research, Gardline Marine Sciences, Lloyd’s Register and Redwing Environmental. As part of the Technology Strategy Board project, GLEAMS had 10 months, starting in September 2013, to assess what glycerine could potentially achieve as an alternative fuel in the maritime and marine sectors, and to examine the technological, regulatory, supply chain and commercial issues relevant to introducing it to the marine fuels market.

The use of glycerine as a fuel in itself was not an entirely new concept; Aquafuel’s glycerine-based technology was already in use in the construction sector for combined heat and power plants. However, it still remained for the technology to be tested at sea – and some remained convinced that it would not work.

The GLEAMS team was required to generate evidence to support marine exploi-tation of glycerine. Tasks included showing how glycerine-fuelled engines could meet current codes and approval criteria, as well as developing design guidance for storing and burning glycerine safely below deck. Other charges involved analysing the economic and fuel supply impacts of expanding marine demand and engaging with the industry to develop user/supplier consortia to drive commercialisation (initially targeting the commercial workboat market).

From the outset, the team knew that there were a number of essential properties that would have to be taken into consid-eration: ‘An environmentally ideal marine fuel would have a high mass to calori�c value, a relatively low number of molecular degrees of freedom, a high molecular input per unit of fuel delivered and a high oxygen content (also extremely bene�cial as regards particulate emissions but tending towards very low Cetane number),’ said McNeil.

It would also need ‘a very high �ash point, to be non-toxic, clean, totally bio-degradable, renewable, have high lubricity and be able to be used in any type of already manufactured compression ignition prime mover’.

As if that wasn’t enough, factors which would have to be assessed would include storage stability, ignition and combustion, resistance to microbiological activity, water separation properties, material compatibility

and compliance with environmental legislation.On land, internally-coated steel

fuel tanks or stainless steel tanks are preferred for storage but, as part of the Technology Strategy Board project, the GLEAMS team needed to investigate the bene�ts and barriers to using it at sea.

What the team told the London workshop is that from an environmental viewpoint, the bene�ts of glycerine are substantial. Not only is it non-toxic and fully miscible with water (meaning there is a limited to no risk to the environment from fuel spillage), it is

non-�ammable at normal conditions; there are no �re or vapour risk criteria associated with it.

It also generates only 3% of the lifetime carbon emissions of diesel per MWh and, as a residue from the biodiesel industry, it has been given a ‘0’ carbon rating (100% carbon free) from the European Union (EU). Used as an OFGEM-approved CHP renewable fuel in the United Kingdom, glycerine is 97% carbon free.

In terms of usable fuel energy, carbon dioxide (CO2) emissions for glycerine come

in at 0.0095 kg/kWh; substantially lower than diesel/marine gasoil (MGO) (0.319 kg/kWh), and lique�ed natural gas (LNG) (0.276 kg/kWh).

Glycerine can also meet nitrogen oxide (NOx) emissions regulations ‘at source’ (20mg/m3), does not contain any sulphur (SOx) (so is Emissions Control Area (ECA) compliant), and burns with a virtual absence of particulate emissions.

‘Glycerine will burn, combust effectively and can form a dual-fuel system. There are no issues with carbon build-up and maintenance is reduced. There are no handling issues. And marine engines with no major construction adjustments can burn glycerine,’ commented Mark Bobby, Gardline Marine Manager.

Technology company Aquafuel says that the fuel could be used in all suitably modi�ed diesel engines – both four-stroke high and medium speed engines and large two-stroke engines – and the technology should be applicable across the range of diesel engines employed in shipping.

Engines will even start on glycerine, although this requires additional pre-heating modi�cations. GLEAMS said that the preferred arrangement is to start on diesel then change over to glycerine, and this process can be done at full power. In addition, the fuel could be stored for around �ve years at 20oC; it doesn’t decompose. In comparison, biodiesel lasts about four months.

So far, so good. But before bunker players start buying up the biofuel industry, they should be aware there are some issues – and these are focused primarily on supply and volume.

To travel the same distance, in comparison with diesel, 1.8 times the volume of glycerine is required.

The argument of the GLEAMS team is that due to the ‘incredibly safe’ nature of glycerine, it could, in theory, be stored in places on a vessel ‘where you wouldn’t even think of storing diesel’ – such as in the hull space.

Glycerine also has a relatively low energy density compared to fossil fuels but this is partially offset by increased ef�ciency:

Glycerine has a contemporary energy density of 16,000 KJ/kg. Diesel, in comparison, has a value of 42,700KJ/kg and LNG demonstrates 46,000KJ/kg (net calorif ic values).

But that’s not the only problem. In addition, there could be limited supply if demand took off as there are also competing uses for glycerine, such as land based CHP.

There is, however, the potential to produce glycerine from algal sources in the longer term. Naturally produced by algae in highly saline environments, the potential initial production

‘Glycerine also generates only 3% of the lifetime carbon emissions of diesel per MWh and, as a residue from the biodiesel industry, it has been given a ‘0’ carbon rating (100% carbon free) from the European Union’

alternative fuels



from this source could reach millions of tonnes.‘If the fuel comes purely from the biodiesel

industry it will end up being in a niche market. That might make it dif�cult for the marine market to take advantage of,’ said McNeil.

The GLEAMS consortium says that glycerine can power any compression ignition engine of any size, and that the obstacles will be the potential growth of the fuel chain and its attraction as a fuel for more effective carbon reduction economic projects. It also warns that logistical and cost considerations are likely to determine the extent of marine deployment.

And largely for that reason, until a comprehensive distribution network is established, GLEAMS will concentrate upon markets where limited volumes of fuel are required and bunkering typically takes place at a single location.

Initial focus markets include wind farm support craft, survey vessels, port/pilot boats, �shing vessels and dredgers. Although glycerine is applicable to newbuilds or retro�ts, it seems that, for the moment, widespread deployment is unlikely.

‘We want to explore and to select what we think will be the most promising entry point into the market,’ GLEAMS clari�ed, pointing out that pollution hazards associated with vessels operating in environmentally sensitive areas could be substantially reduced by glycerine’s benign characteristics.

‘Glycerine may not be a solution for the global market but may certainly be an option for ferries doing short journeys,’ added Tim Wilson, FOBAS Principal Specialist

(Technical Manager) on Marine Fuels and Exhaust Emissions at Lloyd’s Register.

Ken Wittamore, a marine technology advisor and member of the EU Waterborne Technology Platform, said that while fossil fuels will remain the backbone of the maritime industry ‘for the foreseeable future’, legislation and economics will continue to drive more responsible use of energy.

‘Towards 2030 there will be an increased use of high energy density non-fossil fuels. But alternative energy sources and their supporting technologies will continue to increase in importance. On smaller vessels there will be an increased use of “free” energy (such as wind, waves, solar) to supplement other sources.’

And the cost of this innovative new fuel?‘This isn’t an easy thing [to predict],’

said McNeil, acknowledging that one of the variables is the treatment of crude glycerine to produce fuel grade.

He added:‘At this time all zero carbon fuels are more expensive than fossil fuels. If the marine industry has no carbon criteria it will probably never be able to afford to buy it competitively. However, there will be niches in the market that could use it initially. But as there is growing demand it will tend to drive down the price.’

GLEAMS also suggested that there will be an increased cost to due to the ‘environmentally-friendly’ nature of the fuel. In addition, leisure market tax and duty will be payable. On the other hand, enzymatic/biological production of biofuels could bring a step-change in the cost of fuel grade glycerine,

and if the fuel grade glycerine market becomes established, this will be factored into investment decisions by biofuel producers.

The GLEAMS project started off with a projected 10-month schedule, and is due to end in June 2014. However, the team will apply to extend it to a full year.

The second phase of the project, starting in April, will be to carry out land-based engine testing to a marine duty cycle (speci�ed by Lloyd’s Register) with emissions measurements being undertaken by Redwing Environ-mental. In a workshop scheduled for June, GLEAMS aims to demonstrate a generator running on glycerine, and is working with the engine specialist Cummins to that effect.

‘The Technology Strategy Board says that, as with any of the projects it funds, we need to meet the criteria for what we’ve speci�ed we will do. So this really is the start of the process,’ says GLEAMS Interest Group Manager, David Rea. If there is enough interest, the team is hoping that a ‘GLEAMS 2’ will take place.

The next GLEAMS workshop will be held on 11 June at Seawork International 2014, Commercial Marine Exhibition and Forum, ABP Port of Southampton.

Further information on the project and its future events is available on the GLEAMS ‘Interest Group’ website. Membership is free of charge and is available through the following link: http://groupspaces.com/GLEAMSInterestGroup/join/

‘Aquafuel says that the fuel could be used in all suitably modified diesel engines – both four-stroke high and medium speed engines and large two-stroke engines’

alternative fuels


http://groupspaces.com/


In nine months’ time, the furore surrounding compliance with the 0.1% sulphur emission regulation in the Baltic Sea, North Sea and English Channel emission control areas (ECA) should – in

theory – subside. After a somewhat ‘leisurely’ start, the shipping industry has worked to put its house in order, and choices have been made over how to meet the sulphur requirements. Shipowners and operators have had a dialogue with the technology providers – engine or abatement equipment manufacturers – and have come to their individual decisions about how the use of scrubbers, marine lique�ed natural gas (LNG) or distillate fuels will best �t the operational and commercial requirement of their �eets. From 1 January 2015, therefore, compliance with this uncompromising sulphur mandate will be inescapable – or will it?

While industry’s compliance with the 2015 mandate is a legal requirement, with violations requiring the imposition of significant penalties, the current arrangements in place to monitor and effectively police the shipping sector’s adherence to the terms of the regulation are perhaps open to question.

The current 1.0% vessel sulphur emission requirement within ECAs is enforceable by Port State Control within the European Union (EU) and forms part of its overall inspection programme undertaken when a vessel is at berth in a European port. Even though the deadline for 2015 compliance is but a matter of months away, the rather infrequent application of this reporting mechanism is

Much work remains to be done on the ‘policing’ of sulphur emissions regulations in Europe after 2015. Lesley Bankes-Hughes takes a closer look at the problem

Reality check

ECA regulations



currently the only of�cial means by which the upcoming sulphur mandate will be policed.

Before jumping to conclusions, it is only fair to look at how adherence with the present 1.0% sulphur emission mandate has been monitored.

Reports suggest that in 2012, PSC undertook over 7,000 inspections of vessels in Europe, and only 10 were found to be using an incorrect fuel. When Bunkerspot approached the Paris MoU, which oversees PSC, and the European Maritime Safety Agency (EMSA) requesting information relating to fuel violations in 2013, no details were forthcoming and we were referred to PSC in individual member states.

So, as advised, we approached some of the agencies responsible for PSC in EU member states. A spokesperson for the UK’s Maritime and Coastguard Agency (MCA) told us that in 2013 issues were raised over the quality of fuel oil on four vessels during PSC inspections. Three of those vessels arrived at ports in Wales and the other at Tilbury. To put this into context, said the spokesperson, the MCA carried out 1,384 PSC inspections in 2013. There was no clari�cation as to whether the ‘quality’ issue related to any violation of sulphur emission regulations.

The Swedish Transport Agency told Bunkerspot that, in 2013, it undertook 191 inspections of bunker fuel used by ships coming into a Swedish port or used onboard a vessel in a Swedish port. Of these inspections, 10 were found to be in violation of ECA sulphur requirements and reported to a prosecutor. A spokesperson for the agency said that: ‘So far none of the violations reported [by the agency] have resulted in a criminal charge, for various reasons.’

A spokesperson for the Norwegian Maritime Authority (NMA) said that, in addition to PSC, it also conducts spot checks of sulphur levels in the bunker fuel onboard Norwegian-flagged vessels in Norwegian waters. The spot checks are undertaken by NMA inspectors taking samples onboard the vessels and sending them for laboratory testing. To date, said the spokesperson, ‘we have not revealed any violations of the sulphur regulations in Norway.

‘However, NMA is increasing the number of spot checks in 2014. In addition, it is considering other and more effective methods for controlling the sulphur content onboard vessels along the Norwegian coast in the future.’

When questioned fur ther, the agency declined to comment on what these additional methods might be.

Having invested time, money and effort in achieving compliance with the upcoming regulation, European shipowners are, not surprisingly, calling for a more regular and cohesive monitoring system to be put in place. They are looking for a lead from the European Commission (EC) but, at present, there is little sign of any consensus or formulation of a more rigorous ‘policing’ policy at the EC level.

Sulphur emission compliance is on the agenda of the recently formed European Sustainable Shipping Forum (ESSF). In a European Commission Decision published at the end of September 2013, the scope of the forum’s work was laid out. As part of its remit to provide ‘a platform for structural dialogue, exchange of technical knowledge, cooperation, and coordination between Member States, and relevant maritime transport stakeholders’, the ESSF shall ‘provide advice and technical expertise to the Commission on the development and implementation of legislation, policies, projects and partnerships dealing with maritime transport sustainability’.

A spokesperson for the non-governmental organisation (NGO), Transport & Environment, which is one of the members of the ESSF, said that work on monitoring procedures is going on to achieve ‘a harmonised approach in terms of compliance and cost-effectiveness’.

Continuous monitoring of emissions onboard vessels could be one solution, but this clearly has cost implications. Remote sensing of emissions – from the air or via �xed sensors – is also an option under consideration in some European countries, but, at the moment, this may have problems regarding the legal enforcement of the 2015 regulation given that, as the mandate stands, violation can only be proved following a chemical test of the bunker fuel. Perhaps such approaches may play their part in the future as ‘sentinels’, alerting the authorities to the entry into port of ‘suspect’ vessels, but, again, this will require the validation of this enforcement method by the EC, via PSC.

The spokesman for T&E acknowledged that ‘this is not a straightforward question, and there are no straightforward answers’. He also accepted that, given the current methods of regulatory enforcement, ‘there is a clear incentive to cheat’.

As he noted: ‘how are you going to know if a scrubber has been turned off when far out at sea?’

Carl Carlsson of the Swedish Shipowners Association told Bunkerspot that ‘we are taking a �rm position’ on the issue of monitoring compliance.

‘The maritime industry is making major investments in different kinds of solutions ahead of the 2015 challenge,’ he explained. ‘We are doing our homework, we are investing in alternative fuels, etc., and we hope that the government and the authorities will ful�l their part on this.

‘We want to know that if vessels are entering the Baltic Sea and going along the Swedish coast, then the authorities are going to do something about this.’

Failure to act on this, he emphasised, could lead to a culture of non-compliance, which, for those owners who had responded responsibly to the ECA regulation, would be a huge distortion of competition.

One monitoring option is the use of drones which can ‘sniff’ exhaust plumes for sulphur oxide (SOx) and carbon dioxide (CO2). One Danish company, Explicit, is working on a drone pilot programme, with funding from the Danish environment protection agency. The programme began in January and, after a sensor testing phase, the �rst of�cial �ight of the drone will be in April.

The �rst ship inspection using the drone will be in June. According to Jon Knudsen, CEO of Explicit, the Danish Shipowners Association is also assisting with the project in that it is giving access to fuel samples. The drone will also be able to monitor the exhaust gases of vessels operated by Maersk and other shipping companies.

Clearly, the ef�cacy of the drone’s sensor

‘Having invested time, money and effort in achieving compliance, European shipowners are, not surprisingly, calling for a more regular and cohesive monitoring system to be put in place’

ECA regulations



technology must be compared against other measurement data. As such, Knudsen is hoping that Chalmers University of Technology in Gothenburg may join the project. The Port of Gothenburg is co-funding a study at the university which is focused on the monitoring of emissions at the port by �xed sensors located on the Øresund Bridge.

Knudsen points out that �xed sensors are currently an expensive solution, with each installation costing between DKK 1 million-DKK 2 million ($185,000-$370,000). Unmanned aerial vehicles (UAVs) are not as sensitive as �xed sensors but, says Knudsen, they are cost-effective and more scalable.

He also notes that vessel operators know the location of �xed sensors, whereas the deployment of drones does bring an element of surprise into the procedure. When asked how information potentially gathered by a drone would sit with the of�cially sanctioned operations of PSC, he said that, in the case of Denmark, the country’s navy carries out some of the enforcement operations, so there could perhaps be a way of technology providers and agencies working together – the drone could identify a ‘suspicious’ vessel and the navy could then follow up with an inspection.

Jan Fritz Hansen, Deputy Director General

of the Danish Shipowners Association, acknowledged that �xed sensors may have a limited application: ‘It is more of a symbolic thing – it is like a road speed trap where people know that they have to slow down’. However, as an association, he said, ‘we are very worried about the development of a policing system’.

The implementation of this ‘ambitious’ environmental policy, will have a high cost for the association’s members, particularly for those operating permanently in the ECA zone.

‘A container vessel could potentially save some $200,000 [in fuel costs] on a trip in and out of an ECA if it didn’t abide by the rules,’ said Hansen.

‘We are already seeing some segments of shipping where customers are saying that they may choose shipowners who are not complying with the rules.’

Hansen also said that some of the large shipping companies have noted that, out of 1,000 calls into the Baltic Sea, only one check may have been carried out.

‘The risk therefore – one out of 1,000 with only one potential �ne – is quite tempting.’

Some shipping sectors, such as short-sea shipping and ferries, will have to be particularly assiduous about their compliance, he continued. However, if across all sectors, only

80% of operators are compliant, for example, then this will create a distortion of competition.

‘If some sectors are law abiding, but then others are saving hundreds of millions a year, then we will be quite upset – and the legislation just becomes an environ-mental gimmick,’ commented Hansen.

Furthermore, the monitoring of compliance needs to be a pan-European effort. As Hansen emphasised: ‘If Danish ports are stringent, then people will avoid calling at Danish ports – there needs to be a corresponding system in all countries within ECA zones.’

The Danish Shipowners Association is scheduled to hold discussions with the Danish Environment minister in the near future to address the issue of regulatory compliance. ‘We certainly need enhanced intensity on this,’ said Hansen. Shipowners themselves could also sign up to voluntary agreements, with transparency over the disclosure of their emissions.

‘This is going to take everyone to make it work,’ concluded Hansen. While the tools for compliance are �rmly in the hands of the shipping industry in the run-up to 2015, perhaps the regulators could have addressed the issue of enforcement mechanisms with a little more urgency and clear sightedness?

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ECA regulations



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W ith researchers citing a global temperature rise on course to hit or exceed 2oC, there is clear

pressure on the shipping industry to step up and pare back its emissions.

Like many other industries, shipping, which moves around 90% of global trade, is required to meet current and upcoming legislative requirements governing its emissions. With payback time for new ‘eco’ innovations often a driving force behind their implementation, there’s much to be heard about the �nancial impact of abiding by new and upcoming rules, but the underlying issue of the consequences of a warmer world is sometimes sidelined.

And whilst the heat is on when it comes to reducing sulphur oxide (SOx) emissions (as well as nitrogen oxide (NOx) and particulate (PM) emissions), the shipping sector has yet to reach consensus on how a reduction in carbon dioxide (CO2) emissions can be implemented and monitored.

Now, researchers at one institution are arguing that it’s time to start new discussions on how the shipping industry could be affected by a changing climate in the longer term, speci�cally when it comes to CO2.

Researchers at the Tyndall Centre for Climate Research, a partnership between researchers drawn from eight UK research institutions, believe that the two options on the table – accepting a warming climate or dealing with it – each carry signi�cant implications for shipping routes and trading patterns.

According to lead researcher, Alice Bows-Larkin, a reduction in CO2 emissions is something that all sectors can work to achieve, but the scale of the cuts needed to effectively counter a warming climate is much greater than has been generally recognised.

‘Even 2°C of warming above pre-industrial levels is considered to be dangerous; this amount of warming will have different impacts on different parts of the world,’ she says.

‘In fact, rather than being on track to avoid this level of climate change, we are more likely to hit 4°C to 6°C of warming by the end of the century. The trend in terms of CO2 emissions sees that they are growing exponentially.’

Bows-Larkin says that although shipping will not be alone in feeling the effects of a warming climate, it will certainly find that some of the effects it faces will stem from impacts upon other sectors. Factors such as where goods are produced and how they are transported will also have a knock-on effect on shipping, she explains.

Researchers at the Tyndall Centre also believe that there is a very real challenge in the shipping sector that is still not being fully recognised. As Bows-Larkin explains,

if countries make efforts to curb their fossil fuel use in response to climate change, this will in itself have an impact on trade, given that a large proportion of shipping is dedicated to trading fossil fuels. Indeed, she notes, for a country like the United Kingdom, almost half of its fossil fuels are imported.

‘We can be sure that whatever energy system we choose in the future (for example, one with lots of renewables, or one with more coal with carbon capture and storage), will make a difference as to whether we are importing fossil fuels, biomass, or less bulk fuels altogether,’ Bows-Larkin commented.

The Tyndall Centre is renowned for

having worked with business leaders, researchers, policy advisors and the media and public, in order to bring together parties who are developing sustainable responses to climate change.

In a bid to discuss not only how the shipping industry will have to cut its emissions, but also the effects this will have on trade and the shipping system in general, the Centre will host a new conference with the help of expert academic and industry �gures.

Shipping in Changing Climates: Provisioning the Future will take place on 18-19 June as part of the Maritime Logistics & Energy two-week programme of events under the auspices of the International Festival for Business, to be held in Liverpool from the 9-20 June.

This UK conference will form part of the Engineering and Physical Sciences Research Council (EPSRC) and industry-funded Shipping in Changing Climates consortium project.

In January, the Tyndall Centre issued a call for abstracts for the conference, requesting information on a wide range of topics, such as low carbon technologies and practices, low carbon-consumption production systems, and future scenarios, all of which will be brought together in one innovative forum to make headway on exploring these issues.

The response was positive. In answer to the call for submissions, more than 30 abstracts were received, covering a wide range of issues, from fuels of the future, to alternative methods of propulsion; from possible shifts in trade, to policy implications and challenges.

One of the abstracts, for example, focuses on a study to improve CO2 emissions from an Aframax tanker. Submitted in recognition of the fact that the biggest source of energy loss in a ship is found in the propulsion system, it aims to explore the potential of using waste heat recovery systems (WHRS) to make shipping more ef�cient.

Researchers at the Tyndall Centre believe that the shipping sector has yet to wake up to the problem of CO

2 emissions. Rebecca Byers finds out more

Carbon forum

‘LNG is forecast to grow from a very low base to a significant market share by 2030’

environment



The abstract paves the way for a presen-tation at the conference which will anchor this research – its strengths, weaknesses and omissions, and which will show what is termed ‘a multi-objective optimisation’.

This approach is intended to allow a deeper understanding of different Organic Rankine Cycles (ORC) WHRS, to demonstrate that ORC WHRS can reduce the tanker’s fuel consumption, and therefore its CO2 emissions.

This research was carried out by Santiago Suárez de la Fuente, a research academic investigating green shipping solutions at University College London’s (UCL) Institute of Marine Engineering, Science and Technology, and Faculty Senior Lecturer Dr Alistair R. Greig.

Another presentation will take a look at the drivers for the future energy mix in shipping in 2030, suggesting and exploring three possible scenarios for the future of marine fuels. The report, which has now been published, shows that the declining share of heavy fuel oil (HFO) will be offset by lower sulphur alternatives (marine diesel oil (MDO)/marine gasoil (MGO) or low sulphur fuel oil (LSFO)) and by lique�ed natural gas (LNG), and that this movement will be different for each ship type and operational scenario.

Research for this project was carried out by Lloyd’s Register and UCL’s Energy Institute and will be presented by Katharine Palmer, Environmental Manager at Lloyd’s Register.

‘I think that the report underlines that any transition from a dependency on HFO will be an evolutionary process,’ says Project Leader Dimitris Argyros, Lloyd’s Register’s Lead Environmental Consultant.

‘LNG is forecast to grow from a very low base to a signi�cant market share by 2030 – even if there is no major retro�t revolution – most of the LNG take-up will be in new buildings. But it is important to note that an

11% share in 2030 is the equivalent in volume of about 20% of the bunker market today.

‘What we can say is that the uptake of engine and alternative propulsion technology and the emergence of non-fossil fuels can only be driven by a society’s ability to create a world with lower greenhouse gas (GHG) emissions – the technology is not the barrier. Key will be policy and markets.

‘Shipping can control its own destiny to some extent – but shipowners can only focus on compliance and pro�tability,’ suggest Argyros.

Bows-Larkin says that the overall content of the abstracts received for the conference has led to a particular focus on how shipping may change its CO2 emissions.

‘This will be a challenging debate to have, as there will be many people in the industry who, whilst considering it important to achieve fuel ef�ciency, may not be fully aware of the scale of change that is necessary to avoid two degrees of warming,’ she explains.

In recognition of the industry’s heavy focus on the potential for LNG, there will also be a presentation about the role of this new fuel. One factor that will be brought to this debate will be the extent to which LNG could effectively lower CO2 levels from shipping.

Separate research published by Dr Paul Gilbert at the University of Manchester has highlighted that LNG only goes so far in this respect – and in order to effectively address the climate change challenge, more will have to be done.

‘With such unprecedented change to the conventional means of marine fuel combustion, is this not an opportunity to address the challenges of sulphur and CO2 together?’ he questions, adding that: ‘Links between SOx and CO2 emissions mean the sector runs the risk of taking a very short-sighted approach if it chooses to tackle SOx

emissions without thought for the carbon repercussions. Addressing the co-bene�ts would reduce the chances of infrastructure and marine engine lock-in, as well as reducing potential lock-out of future low carbon fuels.’

An argument Dr Gilbert puts forward is that when SOx and CO2 emissions are looked at together, it is not LNG alone that can change the situation, but other solutions such as wind propulsion or hybrid technologies. This is an area that is expected to stimulate lively discussion in the conference, says Bows-Larkin.

‘It is important that we reduce emissions in the short term. Emissions are a cumulative problem and the decisions we make now will have an effect on CO2 levels in the future,’ she sums up. ‘This, and more, all will be explored at the conference.’

The Tyndall Centre believes that the conference will help to raise the pro�le of other changes that might be necessary for the shipping industry, such as retro�tting, wind power, or slow steaming.

‘We can either use high amounts of fossil fuels and see greater levels of climate change, or low fossil fuel and less climate change; but there is no future on offer where climate change does not play a part,’ Bows-Larkin concludes.

The Tyndall Centre is a partnership between researchers drawn from the Universities of Cambridge, Cardiff, East Anglia, Manchester, Newcastle, Oxford, Southampton and Sussex. The partnership, together with contri-butions from Fudan University, form the Tyndall Consortium.

Tel: +44 1603 593 900 Email: [email protected] Web: www.tyndall.ac.uk

environment



http://www.tyndall.ac.uk


‘The Center for American Progress, a lobbyist group, said that lifting the ban could squander the country’s newfound energy security and threaten price stability’

The drive to export US crude oil, a practice banned since the mid-1970s, is heating up as logistical problems and missed pro�ts frustrate domestic producers.

The case for the United States to lift its 40-year ban on crude exports seems to be bulletproof – if you ask the oil producers. Prices for light, sweet crude oil overseas are substantially higher than for their landlocked domestic oil. Many producers want to sell into foreign markets, then take the pro�ts and reinvest them into more US exploration and production.

However, environmentalists and some politicians fear that exporting US crude oil will lead to higher oil prices and long-term pollution problems. According to anti-fossil fuels lobbying organisation, Oil Change Interna-tional, allowing crude exports in order to enable further exploitation of oil is ‘a recipe for disaster’ and will increase oil prices for the US consumer.

‘Forty years on from the Arab oil embargo and America’s oil producers have only one thing on their minds; pro�ts,’ said the organisation.

US re�ners, on the other hand, are not so keen on exporting crude since they are raking in the bene�ts of having cheap, good quality oil at their fingertips. Plus, this abundance of light, sweet oil means they can produce vast quantities of clean products, which they are legally allowed to export.

Early in January, according to media reports, independent re�ner PBF Energy organised a conference call between several US

The US Administration is under increasing pressure to lift the ban on US crude oil exports. However, as Melanie Wold explains, this long-standing legislation continues to polarise opinion

Export potential

trade focus



re�ners to discuss setting up a lobbying effort against lifting the export ban.

Valero has said that it is not against exports per se, but would prefer to see the current licence procedure continue. Valero has a licence to export Eagle Ford crude to its re�nery in Quebec. However, the company has concerns about proposals to allow the unlimited export of crude oil, said Bill Day, Vice President-Media and Community Relations at Valero.

‘To Valero, it makes more sense to keep the majority of the crude oil here as a raw material, take it to American re�neries with American workers, and process it into value-added products like gasoline, diesel and jet fuel. Surplus amounts of those products can then be exported,’ Day said.

US crude oil exports have been banned, for the most part, since the Arab oil embargo of 1973. The Mineral Leasing Act was amended in 1973 to restrict crude exports and the 1975 Energy Policy and Conservation Act cemented it. Since then a rash of regulations have been added, furthering tightening the export noose.

Currently, crude exports are banned, apart from a few exceptions; crude can go to Canada, provided it is used in the country, and some Alaskan production can be exported. Also, oil from the Strategic Petroleum Reserve can be exported if an equivalent amount of product is exchanged for it. And foreign crude can be re-exported.

The United States is currently in a bumper production period. In 2013, the Energy Information Administration pegged output at around 7.4 million barrels per day (b/d), a 1.0 million b/d increase over 2012, and an astonishing rise of 2.4 million b/d since 2008. Plus, it anticipates an additional 1.5 million b/d by 2015, taking the country to in excess of 9 million b/d. Much of the new production comes from hydrofracturing, or ‘fracking’, in �elds such as the Bakken in North Dakota and Eagle Ford in Texas. To put these �gures into perspective, the United States is currently producing about a third as much as all of the Persian Gulf countries combined.

Still, 7.4 million b/d is only about 40% of the country’s daily consumption. Even at current growth rates, the United States will not produce as much as it consumes until 2035, according to the International Energy Agency (IEA).

Valero’s Day said: ‘There is no surplus production of domestic crude oil – the US still has to import a lot of the crude oil that we need – but there is surplus production of gasoline and diesel.’

So why the rush to export crude? It could be quality rather than quantity that matters.

Crude coming from the Bakken and Eagle Ford is extremely high quality – very low in density and sulphur – and US re�ners were not prepared for it. They had spent billions of dollars over the past decade in upgrading their facilities to handle heavier crudes coming from places like Canada and Mexico.

Therefore, when crude started pouring out of the Bakken and Eagle Ford, it created a glut. Infrastructure de�ciencies meant that it was dif�cult to move to re�ning centres, further exacerbating the oversupply. Discounts to international crudes, such as Brent, widened. Sellers took an envious look at the lofty prices for Brent and other non-US light crudes and the die was cast.

Not everyone agrees that lifting the export ban will raise prices necessarily. Research �rm Resources For The Future (RFF) said that exporting US crude could lower gasoline prices in the country by making global re�ning operations operate more ef�ciently.

The increased supply of crude in the international market would put some downward pressure on international oil prices, said RFF, unless the Organization of the Petroleum Exporting Countries (OPEC) responds with matching cutbacks.

RFF added that the ‘hyperbole’ over long-term forecasts of US production has a high degree of uncertainty. ‘The vast majority of light oil wells have only been producing for one or two years, so there is little data upon which to base estimates of the ultimate performance.’

Another issue with the quality of oil being produced in the United States is that, when re�ned, it yields more gasoline than diesel. In a time of burgeoning middle distillate usage, a surfeit of gasoline is not ideal.

The IEA said that global gasoil/diesel demand increased 2.4 million b/d – or 10% – from 2009 through year-end 2013, crediting economic expansion in the emerging economies of the non-Organi-sation for Economic Co-operation and Development (OECD) countries.

In its long-term energy forecast in December 2013, ExxonMobil said that global demand for gasoline will remain �at from 2014-2040, largely because of increased car engine ef�ciency. But global demand for diesel should grow by about 75% to meet the needs of trucks and other commercial transportation.

A products trader said: ‘Outside the US, and I mean everywhere outside the US, [diesel] is the fuel of choice for the future.’

In the US Gulf, most refineries are con�gured to maximise diesel production, said RFF, ‘Which they do by running heavier crudes and using special equipment to squeeze

more diesel out of each barrel of crude’. Running lighter crudes such as Bakken

would yield less diesel, which re�ners have been keen to export due to good pro�t margins and the savings they make on avoiding buying renewable fuel credits, or RINs, which they are mandated to take if they do not have enough blending credits.

There are fears that protectionist measures such as the export ban are creating a global crude quality imbalance.

RFF said: ‘It means that the excess supply of light crude oil stuck in the United States cannot be sent to re�ners elsewhere in the world...and keeps the heavier crude produced outside the US from being re�ned in the US.’

During the Arab oil embargo, ‘national energy security’ and ‘energy independence’ were much bandied-about terms as foreign suppliers were perceived as increasingly unfriendly, and domestic supplies were feared to be rapidly dwindling.

There remain supporters of the original theory. The Center for American Progress, a lobbyist group, said that lifting the ban could squander the country’s newfound energy security and threaten price stability.

‘Since we continue to import one-third of our oil, American families, the economy, and our energy security remain vulnerable to sudden supply disruptions and price spikes,’ it said in its testimony to the US Senate Committee on Energy and Natural Resources in January.

In opposing testimony to the Senate hearing, lobbyist the Council on Foreign Relations said that the export ban law never accomplished what it set out to do. ‘It has now become more of a hindrance than a help,’ said Blake Clayton, adjunct fellow for energy and security.

Industry association the American Fuel & Petrochemical Manufacturers (AFPM) wants to see an evaluation of all laws and regulations that erect arti�cial barriers to a free market.

‘We believe the domestic crude oil export policy debate should be part of a more comprehensive energy policy discussion that examines other barriers to free trade, including The Jones Act, the Renewable Fuel Standard, and regulatory approval and review of critical infrastructure projects, like the Keystone XL pipeline.’ said an AFPM spokesperson.

Melanie Wold

Tel: +1 617 817 5604 Email: [email protected] Web: www.melaniewold.com

trade focus



http://www.melaniewold.com


W all Street is most often blamed for taking advantage of the weak, or so called ‘main street’ businesses that produce basic goods and services in the economy. This

belief rests on the fact that �nancial markets can be opaque to the user who relies on intermediaries to disclose market prices and provide trade execution services. In the wake of market turmoil and �nancial distress post 2008, commodity derivative exchanges, most notably the Chicago Mercantile Exchange (CME) and its main rival the Intercontinental Exchange (ICE), have sprung into action to provide the platforms to bene�t market participants and satisfy increasingly demanding government regulation. But will more transparent market places really be accessible to all users or will intermediaries, such as brokers and banks, continue to dominate the commodity derivative marketplace?

Technology has been slow to advance in commodities derivative markets. It has not been long since these markets involved only two parties, a buyer and a seller meeting by appointment arranged by a mutual broker or �nancial institution. The arrangement was known as the ‘over the counter’ or OTC market. These markets were described as opaque because prices traded were often unreported or reported so late that the information was no longer relevant. As time went on and commodity markets grew, derivatives were listed on organised

Information exchangeInnovations in exchange platforms have provided the transparency that is required for commodity derivatives to evolve. Chris Thorpe takes a closer look at this dynamic and maturing marketplace

finance



exchanges and traded where real flesh and blood humans would bark out orders and �ll execution tickets for their clients.

The foundation of organised commodity exchanges is based on ‘futures’, which are simply standard non-negotiable agreements that obligate the buyer and seller to exchange money for some quantity of product in the future. They are no different than ‘forward’ contracts aside from their standard specifications, size and fungibility between counterparties.

These futures were the �rst standardised instrument to stand in place of two party agreements between, for example, a crop producer and a customer who may have previously had a physical supply agreement. Following an initial transaction, futures could be traded freely from one party to the next holding the same obligation to deliver the stated commodity on a �xed date. Though futures markets were arguably created to facilitate the trade of physical commodities in agriculture and metals, �nancial futures introduced in the 1970s blossomed and eventually dwarfed their predecessors.

The sheer size in the �nancial markets has served to advance trading platforms. What was once a street corner securities market in New York became a formal exchange as early as 1921. These rapidly burgeoning exchanges were also more heavily scrutinised by government regulators who sought to protect naïve main street investors. Interestingly, after-hour stock markets still have nicknames based on the days when stocks traded outside on the street corner and are still known as ‘curb markets’.

The evolution of stock markets, such as the American and New York stock exchanges, stands in stark contrast to the New York Mercantile Exchange (NYMEX) which developed alongside other smaller commodity exchanges throughout the 20th century. It was not until 1978 that oil products were introduced at NYMEX, but oil and its derivatives have made NYMEX one of the most signi�cant

commodity derivative exchanges in the world.From a technology and management

perspective, stock and bond markets deserved more effort and investment in systems early on to provide transparency and liquidity. Though stock markets have developed faster with greater investment in technology, commodity derivative markets have only recently innovated to compete so as to provide greater transparency and liquidity for all clients.

From their beginnings the commodity markets have relied more on a physical presence. After all, most commodity markets were based on a live auction process where buyers and sellers (or their brokers) would meet in a room and �nd the best price offered for a given size or volume. For products that traded in small quantities, the players would meet at agreed times in the day and complete their business in a matter of hours. For example, small volume or ‘thinly traded’ futures markets, such as orange juice, would meet for an hour or two whilst larger markets, such as heating oil, would meet for three to four hours.

There was simply no need for trading longer hours based on demand and the minimum market participants needed to provide price discovery and trading liquidity. Outside trading hours, brokers would speak to clients to prepare for trades the following day or discuss current market conditions. However, the amount of time between market trading hours created great market inef�ciency and price transparency challenges for those without access to brokers having the best information.

As commodity derivative markets matured and followed other securities market advances, more formalised commodity and commodity derivative exchanges were introduced to increase market transparency.

At CME and its subsidiary NYMEX, hedgers and speculative traders have relied on the open outcry market for over 30 years. Customers would call a phone on the exchange �oor and have a clerk relay their order to the ‘pit’ of the trading �oor to a broker

who would then attempt to execute the order. Prior to the technology of hand-held computer tablets and wireless networks, the loudest voice and the largest imposing brokers would often have an advantage. Surprisingly, large light boards that ‘printed’ the most recent prices traded were once the fastest way to track changing market conditions.

Indeed technology and systems have advanced since the �rst futures were traded on exchanges. But it has not been long since the NYMEX used a system called ‘Access’ to facilitate overnight futures trading outside the normal exchange �oor hours.

Access was one of the �rst commodity exchange systems to allow users an on-line tool to see prices and execute futures orders. Still the market for futures in commodities was largely protected by the exchange members who were, by de�nition, running the exchange from the �oor in regular business hours.

NYMEX advanced its clearing of OTC products through the introduction of ‘Clearport’ in 2003 which aimed to provide existing bi-lateral derivatives transactions with a platform to clear the same way that existing futures cleared on the exchange. The London-based ICE exchange had created a similar mechanism back in 2000, which undoubtedly spurred its slower US competition. Both cleared OTC platforms have grown to include hundreds of commodity derivatives, including swaps and options, once only offered by �nancial institutions off-exchange ranging from bunker fuels to real estate indices.

The increase in exchange cleared products available has resulted in a more transparent market for fungible oil commodity derivatives that were once unique to banks and major oil companies. Today, open interest, price changes and mark to market information provide invaluable data for traders and the entire �nancial industry.

Since CME’s acquisition of NYMEX in 2008, technology has continued to advance with the goal of creating the most transparent and liquid marketplace in

‘Simply put, CME Direct will allow traders to see both their exchange futures trades and positions side by side with their exchange cleared OTC transactions’

finance



the world. CME has recently introduced

CME Direct, which advances the existing

Globex live market interface to a new level.

Simply put, CME Direct will allow traders

to see both their exchange futures trades and

positions side by side with their exchange

cleared OTC transactions. This is new for

the exchange clearing world and it �lls a

need that has been magni�ed by internal and

regulatory reporting requirements worldwide.

On Wall Street it is survival of the �ttest.

Lumbering elephants fall prey to sleek and

fast-moving hunters. So what was once

a cumbersome process has, by natural

progress, become more seamless and

transparent for even the occasional trader

and industrial hedger. Even occasional

hedgers and traders now have access to

professional tools once reserved for only

savvy Wall Street brokers. Ease of use is

sure to increase exchange volumes, which

will result in more price transparency and

greater liquidity in the global marketplace.

Although brokers and advisors still play an

invaluable role, improving exchange platforms

will provide the needed transparency

for commodity derivatives to evolve in

the increasingly complex marketplace.

HAMPTON BUNKERING LTD

Worldwide Bunkers since 1970

999 de Maisonneuve Blvd. West, Suite 615Montreal, Quebec, H3A 3L4, CanadaTel: 514-288-2818 Fax: [email protected]

Sylvia Kartanowicz – Susan Cox

Untitled-3 1 15/09/2010 16:28

Chris Thorpe is a managing partner of Brick Consulting Partners and Brick Investment Partners. Chris Thorpe co-founded Hudson Capital Energy, an energy risk management firm, and was an investment banker at JP Morgan. He started his career at Methanex and has held positions in Europe, Canada and the United States.

Email: [email protected] Tel: +1 646 790 5777

Even occasional hedgers and traders now have access to professional tools once reserved for only savvy Wall Street brokers

finance





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To write about the Far Eastern Russian bunker market – and to do the subject justice – is not a project to be undertaken lightly.

The opening up of the North Sea Route (NSR) creates enormous potential for Russian Far East (RFE)-based marine fuel suppliers to expand their presence and take advantage of what could be a lucrative market in the future. Developments are being watched keenly by the local and wider shipping communities alike.

Given the potential of this burgeoning market, it is perhaps not surprising that extracting firm facts and figures from suppliers can be challenging, with many major and upcoming players keeping their cards close to their chests.

Certainly, it seems that suppliers in the RFE aren’t waiting around – they are expanding quickly, and their efforts appear to be paying off. The region has been said to be probably the most rapidly-growing bunker market in the world at this point in time. In 2011/2012 the volume of the RFE bunkering market was estimated at between 2.5-3 million metric tonnes (mt) per year.

The biggest single player in the RFE bunker market is RN-Bunker (a subsidiary of Rosneft). RN-Bunker did not provide detailed

The opening up of the North Sea Route will have a major effect on cargo transit schedules. As Rebecca Byers finds out, Russian Far East suppliers are gearing up for new business opportunities

Looking East

regional focus: RFE



�gures about its operations, athough one supplier in the market suggested it held a market share in 2013 of almost 50%. The second largest player is Alliance-Bunker (a subsidiary of the vertically-integrated Alliance Oil Company, of which 43% is controlled by Alliance Group). Coming in third is Gazprom Neft Marine Bunker.

Last year, reports surfaced that Rosneft was negotiating to purchase oil assets – including shares in Alliance Oil – from Alliance Group, but this speculation was �rmly rebuffed by Alliance. Some industry watchers suggest that a deal may have already been agreed, but Rosneft remains tight-lipped on this.

Even without the deal, RN-Bunker is a leading industry force, but if it had become a reality it would mean that RN-Bunker held control of a stake in the market that was far from the reach of any of its competitors.

For observers outside Russia, it can be dif�cult to gauge the direction taken by the Russian government on bunkering, and even some local suppliers can �nd themselves confused as to the options available.

One source disclosed to Bunkerspot its concern that the government and regulatory instruments could ‘throw a spanner in the works’, hindering expected market growth in the RFE over the next few years. ‘Regarding this matter, the situation might be unpredictable,’ it acknowledged.

However, the Russian government has made known its wish to develop Eastern and Northern territories by promoting the NSR; indeed, this year will see the implemen-tation of a new tariff policy that will allow an increase in cargo volumes through the route.

Bunkerspot spoke to Russian media agency and market analyst PortNews IAA to �nd out more about these tariffs. PortNews explained that last year the Federal Tariff Service (FTS) began to consider and adopt positive decisions on requests for price deregulation from stevedoring companies operating in the Far East basin at marine terminal operations in the ports of Vladivostok, Zarubino, Posiet, Nakhodka, Vostochny and Vanino (except for handling alumina and crude oil). It is hoped that this approach by the FTS will encourage the development of a more competitive environment.

A fast-growing independent operator in the RFE is Tranzit-DV. The company is highly focused on what it sees as increased interest from international companies ‘to use the shortest route for delivery of products from Asia to Northern Europe, and from Asia to the US West Coast’.

Tranzit’s own RFE bunker market share

grew from 7% in 2012 to 10% in 2013 and its forecast for 2014 is that this will more than double to 21%; a projected growth it attributes to an additional anchor bunker station opening in Slavyanka in April 2014, and a new Tranzit-DV anchor bunker station starting operations at the port of Bukhta Troitsa.

In addition, a new Tranzit-DV bunker point opens in Port Petropavlovsk-Kamchatsky this year. The company held a conference on 12-14 March in the town, exploring its New Vision for Sea Shipping between Europe, Asia and the United States. It discussed the prospects for seaports in the Primorsky region and the potential for the use of the NSR as a key transportation corridor.

‘Russians have a very old proverb,’ Olga Kantysheva, Business Development Director at Tranzit-DV, explained.

‘It’s better to see something one time than listen about something a hundred times. So we decided to show our facilities and demonstrate bunkering in progress in a port that is completely unknown for the international bunker market.

‘March is a winter month in Kamchatka,

so all delegates could check for themselves the weather and ice conditions in the port during winter and then decide whether Petropavlovsk-Kamchatsky is good for bunkering or not. This port is suitable for bunkering all year round,’ said Kantysheva.

Largely due to the region’s cold conditions, when it comes to getting bunkers to RFE ports for supply, intermodal transport is hugely important, and logistics must be carefully assessed. Yury Telelyuev, Commercial Director of Vladivostok-based TransoilBunker, explained: ’The majority of local suppliers suffer shortages or an absence of products caused by slow delivery to local regions by railway. Fuel products often come to the local market from the inner part of Russia.

‘Taking into account that the outside

temperature on the way to the RFE can reach -30°C, the fuel in railways tanks becomes solid. On arrival at local oil terminals for discharging, these railway tank wagons need to be pre-heated to make the fuel liquid,’ he added.

And that takes time. In fact, Telelyuev says, the additional time spent on this, coupled with the speed of handling the railway tanks, creates congestion. ‘In other words, the level of delivery of fuel to our region [has been] less than the demand for supply.’ Teleyuev said that he believed this situation would improve soon.

‘Of course, during stock out,’ he added, ‘the prices are [increasing]. Here the prices for intermediate fuel oil (IFO) rose from $445-$450 per metric tonne (mt) at the beginning of February to $520-$540 per mt [over the following three weeks].’

‘Marine gasoil (MGO) saw a smaller price rise over this timeframe, increasing from $750 to $770 accordingly.’

Tranzit-DV told Bunkerspot that it had started to deliver fuel oil to the RFE as long as two years ago using vessels transiting the NRS and Southern Sea Route.

Some players say that competitive

prices for fuel oil in the region makes it the most attractive bunker market in Asia. Indeed, in September 2013, Platts reported that sales of bunker fuel had plummeted by around 20% at China’s Shenzhen port since the start of the year.

The fall was attributed directly by sources to the fact that more vessels were taking advantage of lower prices at RFE ports, with some ships deviating from their routes and calling speci�cally at RFE ports to load cheaper fuels.

‘The deviation expenses for vessels going to and from the US West Coast that call for bunkers in Petropavlovsk Kamchatsky port are the lowest among all RFE ports and the price for fuel is considerably lower than in non-Russian ports (Los Angeles, Seattle,

‘Largely due to the region’s cold conditions, when it comes to getting bunkers to RFE ports for supply, intermodal transport is hugely important, and logistics must be carefully assessed’

regional focus: RFE



Busan, Shanghai),’ says Tranzit’s Kantysheva.However, one source familiar with the

market cautioned over a number of ‘price points’ on supplies in Vladivostok, warning that the pricing discussion was ‘complex’.

In a report in April 2013, Platts also referenced the shift in demand from some Asian ports to those in the RFE, but cautioned: ‘Ships must pay a Russian export tax if they don’t have cargo loading or discharging schedules there. As a result, Russian bunker prices are higher than North Asian ports for vessels without cargo works if they call on those ports only to load bunker fuel.’

Bunker price reports showed that by 25 February, 180 centistoke (cst) fuel was at an average of around $526 per mt for Nakhodka, Vladivostok and Vostochny, in comparison to around $627 (Hong Kong), $632 (Singapore) and $653 (Pusan).

‘In 2013, the rapidly growing bunker market of Vladivostok demonstrated stability in prices,’ explained PortNews IAA: ‘During the reporting period, the average benchmark price for IFO 380 HS in the port of Vladivostok remained �rm, at $530 per mt, which is 5.3% lower than in the same period in 2012.

In late November, the prices went into a nosedive on the back of the high

sulphur product oversupply in the market. In December, the price decline in the region was driven by bunker suppliers seeking to sell out stocks until the end of the year. As a result, the average price for a tonne of 380 cst HS fuel oil dropped to $475.

‘The average price for the high sulphur product in the port of Singapore was at $602 per mt, which is 15% higher than in the port of Vladivostok,’ continued PortNews IAA.

‘Between July and November, the average price of MGO settled at $833 per mt (11% below the price in the port of Singapore). By the end of the year, the average indicative price for MGO hit its low of $780 per mt. The average benchmark price of this grade of fuel in the reporting period was 2.% down from the same period in 2012.’

Another market source said that it currently saw great demand in the RFE, with high numbers of containerships calling at the ports suggesting that customers were changing their habits.

‘Things are happening very fast over there,’ the source added, noting that discounts had ‘gyrated’ up and down over the past few months as demand played out against weather and infrastructure challenges.

For those who can supply in the RFE,

there are potentially great benefits to be reaped. But one thing suppliers will likely have to take into account is quality. RN-Bunker, the leading force in regional operations, previously announced a drive to implement a quality management system (QMS) for the marine fuel supply chain in Nayada and Nakhodka Port Bunker.

Its QMS drive started in October 2012 with Cross Keys Group acting as an advisory partner. Rollout commenced in mid-2013. The RN-QMS has continued to be introduced elsewhere in the Russian Federation, and it is likely that this will impact on other suppliers. Indeed, it is anticipated that Rosneft aims to raise this to a national standard by the end of this year. And if that happens, and RN-Bunker strengthens its relationships with ‘quality’ accredited suppliers, then this will further cement its position as the leading force in the RFE bunker market.

Rebecca Byers Bunkerspot reporter

Tel: +44 1295 814455 Email: [email protected]

regional focus: RFE




Conferences include:• Maritime & Logistics Conference• Shipping in Changing Climates: Provisioning

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Courses and Seminars include:• UK International Transport Policy Forum• Report Writing for Marine Surveyors• The WISTA Grand Debate• An Introduction to Shipping• Running a Successful Marine Survey Company• An Introduction to Bunkering• Marine Casualties & Claims Seminar• Hill Dickinson Seminar: Using Social Media at Sea • Marine Casualties and Claims• IBIA Bunker Seminar: Qualifying Quality

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The shipping market across Latin America is poised for growth, and so too is the market for fuel distribution. In large part, this is due to increased investment in the maritime and logistics

infrastructure throughout key locations across Latin America, as well as growth in the shipping and energy sectors. Due to the changing dynamics in the region, for fuel distributors and resellers with the resources, �nancial strength and infrastructure to support their customers, there are opportunities for growth and development.

As a leading global physical distributor and reseller of marine fuels, OW Bunker has strategically expanded its operations across Latin America and the Caribbean in recent years to ensure that the company is best placed to respond to increased demand from customers. The company recently launched operations in Cartagena, Colombia, which complement existing operations in Brazil, Chile, Panama, and Uruguay. For OW Bunker, the reasons for establishing operations in these locations are many. But there are three particular features that I will focus on, which explain why and how the bunker market in Latin America is poised for both growth and renewal as it works to meet changing customer needs.

Since the North American Emission Control Area (ECA) was established in 2012, the bunker market across the East and West coasts

Pedro Gomez of OW Bunker Latin America explores the region’s changing bunker market and explains why ECA regulations are bolstering the market for LSFO supply at gateway locations

Drivers for growth

‘Countries such as Colombia and Panama, for example, have driven forward measures to enable the bunker industry to develop and grow in line with demand’

regional focus: latin america



of the United States has responded to a signi�cant increase in demand for low sulphur fuel oil (LSFO). Now, given the implementation of the Caribbean ECA, which came into effect on 1 January this year and also requires vessels to burn fuel with a sulphur limit of 1.0% in waters around the US Virgin Islands and the coasts of Puerto Rico, demand for LSFO has again increased. It is in meeting this demand that the bunker market in Latin America – most signi�cantly in Colombia and Panama – is particularly well positioned to respond.

Within the region, Brazil, Chile, Argentina and Colombia produce low-sulphur crude oil and have a healthy re�ning capacity.

Being able to meet customer demand in Colombia and Panama is particularly important, as geographically these are the two most viable locations to source compliant products before entering ECA waters. However, meeting new emissions regulations is not just about supplying product, it is also about ensuring control over the supply chain, providing assurances as to the quality of products sold and ensuring it is distributed in the most ef�cient and cost-effective way.

The creation of such a robust model of end-to-end supply means supplying product only from quality sources and ensuring that the most rigorous testing and veri�cation procedures are in place to test the speci�-cation of fuels before they are distributed to customers. Given that the compliance requirements for ECAs in both North America and the Caribbean are stringent and the punishments (particularly in North America) �rm, customers cannot risk buying off-spec products. To facilitate this process, our customers are provided with a full speci�cation analysis in advance of physical deliveries, prior to the usual testing procedures conducted by an external fuel quality inspection company to assure against this risk.

Meeting increasingly stringent environ-mental regulations is also about working in partnership with customers to ensure that they follow a compliance procedure and fuel procurement process that works for their business. In supplying LSFO to meet the requirements of the North American and Caribbean ECAs, there is no one size �ts all model for how and when they ought to be supplied. It requires a clear understanding of the local and regional markets as well as the technical know-how and support systems to ensure that fuel is supplied at the most bene�cial location, by the most appropriate means. This must be done to ensure that the correct fuel switching procedures can be followed before entering

ECA waters, without damaging engines. If done incorrectly it can have an impact on downtime resulting in signi�cant costs.

The project currently underway to expand the Panama Canal is, and will be, another key in�uence in the development of the shipping and bunker industries in Latin America. Following the completion of the expansion project, global supply chain patterns are going to alter, with the biggest post-Panamax vessels passing through the Panama Canal largely for import/export from the United States, and the now smaller 10,000-13,000 twenty-foot equivalent unit (TEU) vessels predicted to fall onto the Latin America to Asia and Latin America to Africa trades.

The third lock will increase the draft capacity of the canal signi�cantly to allow for post-Panamax vessels, meaning the amount of cargo passing through the canal will increase. However, the number of vessels transiting along the canal may lessen, along with the level of congestion at ports and canal entrances, which has fuelled a large part of the demand for bunkers in the past. However, fuel distributors will bene�t from the increase in feeder traf�c from the larger vessels at both sides of the canal, and so too will companies operating from those ports that have invested in dredging and expanding berths to cater for larger vessels.

Countries such as Colombia, Argentina and Chile have deep ports, and Costa Rica, Jamaica, the Bahamas and Cuba, amongst others, already have port expansion projects underway or have signaled an intent to develop their offering for larger vessels. So, while vessel calling patterns and customer requirements may change, there are signi�cant opportunities for marine fuel companies as well as their customers.

For marine fuel distributors, the focus over the coming year, or until the expansion is complete, is going to be in assessing and responding to market demand across Latin America as owners and operators adjust their operations and �eets to enable them to operate more ef�ciently given the expanded waterway.

It is about working with customers to ascertain what the most economical and ef�cient refuelling locations will be as well as the most appropriate means of distri-bution depending on the size of the vessel and intended voyage. It is also about working with customers to create the most appropriate fuel procurement plans and ensuring that they have access to the right products when and where they need them.

Finally, the third salient aspect of the changing marine fuel market in Latin America is the growth and development of the region as a whole. There has been signi�cant investment in the shipping and logistics sectors across the region in recent years and this trend is set to continue. This has enabled fuel distributors such as OW Bunker to invest in expanding a presence across the region while developing strong working relationships with local suppliers and partners. The reputation and image of Latin America as a bunkering location has developed signi�cantly during this time. Countries such as Colombia and Panama, for example, have driven forward measures to enable the bunker industry to develop and grow in line with demand. For OW Bunker, this requires transparency and trust in working with customers as well as putting all possible measures in place to guarantee the quality and quantity of product supplied and working to save customer’s time and money, so that they too can take advantage of all of the opportunities that Latin America can provide.

Pedro Gomez Regional Manager, OW Bunker Latin America OW Bunker acts as a physical distributor as well as reseller of marine fuel, and operates a global f leet of around 30 bunker vessels. OW Bunker also provides advanced risk management solutions aimed at controlling costs, minimising risk and protecting against market f luctuations.

Web: www.owbunker.com

‘In supplying LSFO to meet the requirements of the North American and Caribbean ECAs, there is no one size fits all model for how and when they ought to be supplied’

regional focus: latin america


http://www.owbunker.com


The shipping industry is preparing to sail the Arctic Ocean. The Interna-tional Maritime Organization (IMO)

has developed a draft International Code of Safety for Ships Operating in Polar Waters, or Polar Code, that will be forwarded for consideration later this year by the Marine Environment Protection Committee (MEPC) and the Maritime Safety Committee (MSC). The proposed Polar Code includes mandatory requirements pertaining to navigation, ship design, construction, equipment, training, search and rescue operations, and, last but not least, the protection of the Arctic and Antarctic environments.

The IMO resolution MEPC.189(60), which entered into force on 1 August 2011, amended Annex I of MARPOL 73/78 to protect the Antarctic from pollution (by limiting the carriage and use of heavy grade fuel oils). Surprisingly, the resolution did not protect the Arctic. However, thinner ice formations in the Arctic make it viable as an alternative and more ef�cient trade route between certain Northern hemisphere ports during warmer summer months.

The Torremolinos protocol offered solutions to mitigate speci�c risks of �shing vessels operating in the polar region. For example, the protocol addressed the problem of freezing �re mains by including the use of heating systems. The Polar Code considers cold temperatures will also reduce the effectiveness of numerous components on the ship, ranging from deck machinery and emergency equipment to sea suctions. As with heated �re mains, heated ballast tanks would likely be required in future vessel designs. However, missing from Polar Code draft content are provisions for adequately heated fuel oil tanks, especially for distillate fuel oil tanks.

Although heating coils are included in

residual fuel oil tanks to lower fuel viscosity for pumpability, heating coils are rarely, if ever, incorporated into distillate fuel oil tanks. Conversely, in recent years, distillate fuel coolers have been recommended in an effort to increase viscosity and combat fuel pump leaks and/or seizing of fuel injectors resulting from ultra-low sulphur distillate fuel’s inadequate lubricity properties.

With Arctic winter sea temperatures hovering near 0°C, it is essential that distillate fuel oils used in emergency diesel generators and lifeboat engines comply with ISO 8217:2012 DMX grade speci�cations. These speci�cations include a cloud point maximum of -16°C to ensure adequate �ow. Cloud point is the temperature at which wax crystals begin to form from the paraf�n normally found in distillate fuel oil. Distillate fuel oil with a cloud point greater than -16°C will accumulate wax deposits that can lead to poor pumpability and �lter plugging. In certain

cases where the fuel is subjected to extremely cold conditions, the fuel will reach its pour point and solidify in storage leading to engine starvation. Therefore, it is recommended that the cloud point should be between 4°C to 6°C below the lowest ambient temperature the vessel will be operating at to ensure the fuel does not gel during storage or handling.

Distillate fuel oil grades typically have two maximum pour point requirements, 0°C to 6°C (summer) and -6°C to 0°C (winter), depending on the grade. Some marine gasoil (MGO) or DMA grade fuels that meet all ISO 8217:2012 speci�cations, including pour point, can still have a high cloud point. Although ISO 8217 de�nes a well-known fuel quality standard in which marine fuel oil is commercially bought and sold, ship operators often assume that distillate fuel oil samples are always of the same quality and therefore do not need to be analysed. Yet, that is not the case. Take the following fuel sample

As the Arctic Ocean opens up to increasing maritime trade, Albert Leyson of Drew Marine urges operators to reassess fuel flow parameters for distillate fuel oil

Climate change

‘Until ISO 8217 is amended to include new test parameters, such as cloud point and CFPP, that do address distillate fuel flow, it is unlikely the Polar Code will offer a solution to mitigate the risk of fuel gelling’

Parameter Unit Limit DMX DMA DMZ DMB

Cloud point °C Max -16 - - -

Pour point, Winter °C Max - -6 -6 0

Pour point, Summer °C Max - 0 0 6

Excerpt from ISO 8217:2012 - Table 1 - Distillate Marine Fuels

fuel issues



received in January 2014 from a vessel in

Baltimore that reported trouble managing

MGO onboard during the cold weather.

The Gibraltar-based supplier’s bunker

delivery note (BDN) indicated a pour point

of -18°C. However, pictures from a sample

obtained from the vessel’s MGO tank revealed

fuel gelling at ambient temperature. Further

analysis by Oiltest Marine Services indicated a

cloud point of +25°C even though the supplier

pour point was con�rmed as -21°C. Since the

fuel analysed met the DMA grade speci�cation,

it is unlikely that a claim against the supplier could be �led unless the additional parameters were stipulated as part of the bunker contract.

For the Arctic-bound, Drew Marine recommends the inclusion of the additional parameters for cloud point and cold �lter plugging point (CFPP) in the bunker contract and in fuel analysis. CFPP is the lowest temperature at which a fuel will give trouble-free �ow. Fuels analysed for cloud point, CFPP, and pour point from several North American bunker terminals revealed a varying degree of results from each sample analysed for these critical fuel �ow parameters (see Figure 1). Therefore, it is essential that cloud point and CFPP be added to routine shore-based laboratory testing programmes. By knowing the results for these parameters, fuel �ow through the ship’s fuel storage and service systems can be managed more effectively in cold climate operation.

For ships that routinely operate in Arctic or cold waters, Drew Marine recommends the DREW XP Cloud Point Meter for onboard determination of cloud point. By immediately testing for cloud point, operators can assess whether fuel �ow-related problems would arise and whether cold �ow improver additives are needed to maintain fuel �ow.

While kerosene is more commonly known and used by ship operators when gelling occurs, it is expensive and it merely dilutes the problem. Kerosene is more re�ned than typical marine distillate fuel. Furthermore, kerosene has also been heavily additivised with cold �ow improvers that warrant it a freezing point maximum of -30°C. Freezing point is the lowest temperature at which the fuel remains free of solid hydrocarbon crystals that can restrict the �ow of fuel through �lters if present in the fuel system. To minimise the use of kerosene as a diluent on ships, Drew Marine recommends treating �ow problem fuels with its latest fuel additive, AMERGY PPD.

AMERGY PPD modi�es the crystalli-sation of the wax or paraf�n normally found in distillate fuel and prevents the wax’s formation on it in large layers or sheets of crystals that can eventually clog �lters and pipes. The total amount of wax in distillate fuel can vary, from as little as 5% to 25%, typically, based on the quantitative determination of the carbon number distribution, and it is dependent on crude source, re�nery capability, and the distillate blend components used (see Figure 2). AMERGY PPD has been formulated to depress the pour point and improve the cold �ow properties of typical marine distillate fuels. The advanced chemistry in AMERGY PPD minimises the need for

Oiltest Marine Services - Marine Fuels Analysis Report – FINAL

To : XXXXXXXXX Attn: XXXXXXXXX

Vessel Name M/V XXXXXXXXXX Attn : Chief Engineer Bunker Date 02/JAN/2014 Bunker Port GIBRALTAR Bunker Supplier XXXXXX BUNKERING Sample Date 22/JAN/2014 Seal Number 217495 Received By Lab 28/JAN/2014 12:36:00 PM Sample Number T14028019 Grade SO 8217:2012 DMA

Tested Parameters Result Specification Density, kg/m3 @ 15C 873.5 890.0 Max Viscosity cSt @ 40C: 4.0 2.0/6.0 Min/Max Water, % v/v 0.15 Sulphur, %m/m 0.09 1.50 Max MCR 10%, % m/m 0.01 0.30 Max Total Sed, Exis., % 0.01 Flash Point, Deg C 88.3 60.0 Min Pour Point, Deg C -21 -6 Max Appearance: PASS Clear & Bright Ash, % m/m 0.010 0.010 Max Vanadium, mg/kg 0 Sodium, mg/kg 1 Silicon, mg/kg 1 Aluminum, mg/kg 1 Fe, mg/kg: 7 Pb, mg/kg: 0 Mg, mg/kg: 0 Zn, mg/kg: 0 Ca, mg/kg: 1 Ni, mg/kg: 1 Cetane Index: 45.5 40 Min

Additional Parameters Cloud Point, Deg C 25 Cold Filter Plugging Point, Deg C -5

While kerosene is more commonly known and used by ship operators when gelling occurs, it is expensive and it merely dilutes the problem

fuel issues



expensive kerosene addition and dilution. Since the amount and type of wax can

vary in marine distillate fuel, AMERGY PPD treatment ranges from 50 parts per million (ppm) to 2,000 ppm (1 litre per 20 metric tonnes (mt) to 1 litre per 0.5 mt), based on the cloud point result. Vessels intending to voyage into colder climates but taking bunkers from warmer climates, as in the example provided, should treat their fuel prior to bunkering to ensure proper mixing and trouble-free �ow when operating in cold conditions. AMERGY PPD should be

dosed directly into the nominated bunker tanks and non-nominated tanks that will be used while operating in colder geographies.

Until ISO 8217 is amended to include new test parameters, such as cloud point and CFPP, that do address distillate fuel �ow, it is unlikely the Polar Code will offer a solution to mitigate the risk of fuel gelling. To avoid being stranded in the remote Polar regions, Drew Marine recommends cold �ow improver treatment with AMERGY PPD to ensure that wax deposits are modi�ed suf�ciently to prevent fuel �lters from choking.

Drew Marine provides technical solutions and services to the marine industry with a comprehensive range of advanced marine chemicals, and equipment.

Albert Leyson Marketing Manager Drew Marine USA, Inc. Tel: +1 973 526 5738 Fax: +1 973 887 1426 Mob: +1 862 222 4085 Email: [email protected]

Figure 1: Variability in Fuel Flow Properties – Cloud Point (CP),Cold Filter Plugging Point (CFPP), and Pour Point (PP) Figure 2: Variability in Fuel Wax Content by Carbon Number

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fuel issues





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Energy, and transportation energy in particular, has long been an important part of the research and development

portfolio at Sandia National Laboratories, especially at its Livermore, California, campus. The world-renowned Combustion Research Facility, for example, has a nearly four-decade track record in advancing technologies used in the internal combustion engine, work that has had a direct impact on the fuel ef�ciencies and low emissions found in today’s automobiles.

As it continues to expand its Livermore Valley Open Campus (LVOC) footprint, Sandia is focused more than ever before on a speci�c area of energy research: hydrogen and fuel cells. It turns out that fuel cells can play a big role in areas other than road transportation, and a recent project demonstrates that the world’s ports might be able to make use of them as a clean, affordable power source.

Clean hydrogen power that is expected to lower emissions and reduce energy consumption will be coming to the Port of Honolulu in 2015 after the completion of a new, Sandia-led fuel cell technology demonstration, one that could lead to a commercial technology for ports worldwide.

The work comes on the heels of a 2013 study and analysis by Sandia that con�rmed the viability of hydrogen fuel cells to provide auxiliary power to docked or anchored ships (see Bunkerspot August/September 2013). Sandia’s hydrogen researchers have now joined with several partners in the follow-up project, which will result in a portable, self-contained hydrogen fuel cell unit that can �oat on a barge, sit on a dock or be transported to wherever it is needed to provide electrical power.

Ports have been a major source of water and air pollution in the United States but have remained relatively unregulated until recent years. As ports have begun to expand and

their impact on the environment has become more apparent, port operators face a variety of regulations. Many ports have begun to enact sustainability goals or adopt green practices, and that’s where fuel cells can play a role.

‘No one has ever built this kind of custom unit for this purpose,’ said Sandia’s project manager, Joe Pratt. The unit will �t inside a twenty-foot equivalent unit (TEU) shipping container and will consist of four 30-kilowatt fuel cells, a hydrogen storage system and power conversion equipment.

The system will be delivered to and deployed by Young Brothers Ltd, one of

the project partners and a primary shipper of goods throughout the Hawaiian Islands. The unit is undergoing detailed engineering and design through mid-2014 and, after fabrication, assembly and training for Young Brothers’ operators, will be operational during a six-month deployment in early 2015. Young Brothers, the project’s demonstration partner, is a subsidiary of Foss Maritime Company, a shipping �rm that has strong environ-mental and �nancial interests in the project.

After conducting a study of various ports in 2013, Sandia analysed Young Brothers’ shipping operations in more detail. Like many operators, the company uses diesel engine generators to provide power to refr igerated containers.

‘We compared the efficiencies of their diesel engines versus fuel cells, studied the energy ef�ciencies at various power levels and estimated the savings and reductions in emissions that would be realised if they were to convert to a fuel cell-powered operation,’ said Pratt.

Analyses have shown that when generators are frequently producing less than maximum power, such as in the Hawaii application, the ef�ciency advantage of fuel cells compared to the combustion engine increases, he added.

Although the study had to make some assumptions (the purchase price

of hydrogen, for instance), it determined that Young Brothers could save fuel and energy while greatly reducing emissions, if it switched primarily to fuel cells.

With promising study results, the US Department of Energy’s Of�ce of Energy Ef�ciency and Renewable Energy (EERE) and the US Department of Transportation’s Maritime Administration (MARAD) decided to fund the demonstration. The project’s other partners include Hydrogenics Corp., which will design and build the prototype unit and supply the fuel cells, and Hawaii Natural Energy Institute, which will provide assistance with hydrogen supply issues.

Other stakeholders include the US Coast Guard (USCG) and its local Sector Honolulu

An innovative fuel cell technology project for the maritime sector is poised to move to the next level, as Mike Janes of Sandia National Laboratories explains.

Power source

‘A low-temperature proton exchange membrane (PEM) fuel cell system, fuelled by hydrogen stored at a pressure of 5,000 psi, was selected for the maritime project’

fuel cell technology



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of�ce and the American Bureau of Shipping (ABS). These organisations have regulatory authority over the design and operation of the prototype and see the project as a way to assist their development of formal regulations for hydrogen and fuel cells in the maritime environment. They, along with the Department of Energy’s Hydrogen Safety Review Panel, will review the safety aspects of the design and operating plans.

In addition to its project management role, Sandia is providing technical expertise in hydrogen and fuel cells.

Following the six-month deployment of the fuel cell system, Pratt said the project team will analyse the project’s successes and challenges, including the operating and cost parameters needed to make a business case at other ports.

A low-temperature proton exchange membrane (PEM) fuel cell system, fuelled by hydrogen stored at a pressure of 5,000 pounds per square inch (psi), was selected for the maritime project, said Pratt. He pointed to several reasons as to why PEM technology is being used.

The PEM systems are relatively mature technologies that have been demonstrated to be durable even when operated in a stop/start intermittent duty cycle mode as required by the maritime application. In addition, the low-temperature PEM systems have higher ef�ciency compared to moderate or high-temperature fuel cell systems

when operated in a start/stop duty cycle.PEM systems also have higher

power densities compared to other fuel cell systems, Pratt said, which is important in the maritime/shipping environment where space is at a premium.

Environmentally-speaking, PEM fuel cell systems emit only water at the point of use and help improve air quality in support of goals and regulations to reduce criteria pollutant and carbon dioxide (CO2) emissions at ports. Finally, having hydrogen fuel available at ports provides an opportunity to support additional zero emission demands such as �eets of fuel cell-powered light/heavy duty vehicles and ground support equipment, which are in the early commercialisation phase.

The long-range goal, Pratt said, is to develop a commercially-ready technology that can be widely used at other ports. The project team sees a strong market need and desire for a fuel cell solution, not only at maritime ports but also for other applications, such as providing power to users that are not connected to an electric grid.

The maritime fuel cell deployment is just one of many activities going on at Sandia related to hydrogen and fuel cells. The labs’ Center for Infrastructure Research and Innovation (CIRI), for instance, is a partnership-based R&D facility that is coordinating critical materials, science and engineering research capabilities needed to improve performance and reduce costs associated with hydrogen

infrastructure in the transportation realm.CIRI will serve as a key hub for another

important partnership known as the Hydrogen Fueling Infrastructure Research and Station Technology (H2FIRST). In tackling the hydrogen refuelling infrastructure problem head-on, the partnership hopes to pave the way toward more widespread deployment of hydrogen fuel cell electric vehicles.

‘We think initiatives like H2FIRST and CIRI, coupled with deployment projects like the one going on in Hawaii, can create a path for a wide variety of hydrogen fuel cell applications, said Sandia’s Joe Pratt. ‘We’re creating opportunities for private industry to pool their resources to overcome technical hurdles, while at the same time demonstrating the viability of those applications. It’s an exciting time.’

Sandia National Laboratories is a multi-programme laboratory operated by Sandia Corporation, a wholly owned subsidiary of Lockheed Martin Corporation, for the US Department of Energy’s National Nuclear Security Administration under contract DE-AC04-94AL85000. With main facilities in Albuquerque, New Mexico, and Livermore, California, Sandia has major R&D responsibilities in national security, energy and environ-mental technologies, and economic competitiveness.

Web: www.sandia.gov/

‘The follow-up project will result in a portable, self-contained hydrogen fuel cell unit that can float on a barge, sit on a dock or be transported to wherever it’s needed to provide electrical power’

fuel cell technology


http://www.sandia.gov/


Shipowners, operators and charterers are currently faced with unprec-edented legislative and commercial

pressures. Price-softening and a lack of demand in the market, mainly as a result of the credit crunch post-2008, has led to large numbers of vessels being laid-up in either hot or even cold mode. The steady delivery of newbuild vessels into an already oversupplied market, coupled with a weak global economy, has put yet more downward pressure on freight and charter rates. Ships that are working need to be operating as ef�ciently as possible to ensure they deliver an optimum level of pro�tability. In reality, this equates to reducing operational costs wherever practicable.

As the Moore Stephens’ report, OpCost 2013, highlights, the three major costs in ship operation are the crew, bunker fuel and dry docking for maintenance. As crew numbers are governed by best practice and legislation, key savings must be made by making fuel usage as economical as possible and timing dry docking for maintenance to when it will be most bene�cial in terms of performance and reliability. Bunker fuel costs can often account for at least 60% of total operating costs so the assessment of fuel consumption is fast, becoming an integral part of shipowners’, operators’ and charterers’ operational strategies, and an understanding of overall fuel ef�ciency should be high on their agenda.

The introduction of the International Maritime Organization’s (IMO) Energy Ef�ciency Design Index (EEDI) and Ship Energy Ef�ciency Management Plan (SEEMP) guidelines were driven by a desire to reduce carbon dioxide (CO2) emissions, but greater ef�ciency should also lead to cost savings. But how can vessel ef�ciency be calculated with the degree of accuracy required to make it more than just a best guess?

The key to understanding vessel

ef�ciency is the ability to collect smart data by accurately measuring all the different parameters relating to energy ef�ciency. Parameters that in�uence a ship’s energy consumption include its technical ef�ciency, its state of maintenance, prevailing weather and sea conditions and operational factors such as load and trim conditions.

The SMARTSERVICES suite comprises management, analysis, consultancy and benchmarking components which optimise the ef�ciency of vessel and �eet operations. It all starts with accurate measuring. Data from vessel systems including shaft torque meters, fuel �ow meters, global positioning systems (GPS), speed logs, anemometers, electronic chart display and information systems (ECDIS) and echo sounders is collected onboard, and integrated within all BMT SMARTSERVICES solutions. This information is then combined with external environmental data – wind, waves, current – and further processed using unique algorithms to analyse many different performance coef�cients including:• Power coef�cient - Increased power

absorption, due to the effect of fouling on the ship’s hull or propeller for example, is directly re�ected in an increase of the power coef�cient

• Hull coef�cient - Provides a measure of changes to the hull’s condition due to fouling, for example, over time

• Propeller coefficient - Isolates the performance of the propeller and indicates the propulsive ef�ciency

• Speci�c fuel oil consumption coef�cient - A measure of the fuel consumption of the main engine is a direct indication of engine ef�ciency

• Fuel oil consumption coefficient - Highlights the overall changes in fuel consumption and is an indication of total vessel performance.The system uses Key Performance

Indicators (KPIs) as an onboard, real-time tool to assess vessel performance and inform the ship’s crew about changes to operational ef�ciency. By monitoring the KPIs, the crew or onshore �eet management team can quickly identify any degradation and take corrective action. SMARTSERVICES can also run detailed analytics of historical data to spot critical trends in performance that could affect future operations and help to optimise the scheduling of maintenance events and, subsequently, quantify the effectiveness of any such events.

All parameters are measured through sensors installed during the initial �t-out or retro�tted during routine maintenance.

Vessel performance monitoring equipment can also assist in compliance with emissions regulations. In the mid-1990s, estimates indicated that the shipping industry’s share of global CO2 emissions could increase by some 20%-30% by 2050. In response, the IMO introduced a raft of new regulations including the ship pollution rules contained in the International Convention on the Prevention of Pollution from Ships, known as MARPOL 73/78. Since October 2013, every ship visiting French shores must report its CO2 emissions for its particular voyage.

Emission Control Areas (ECA) for the US Caribbean, including Puerto Rico and the US Virgin Islands, came into force in 2014. Worldwide, it is likely that increased regulatory requirements to reduce CO2, nitrogen oxide (NOx), sulphur oxide (SOx) and other ef�uents, as well as the general environmental impact of ships, will lead to even more stringent recording and reporting requirements. Measuring and recording tools, such as BMT SMARTSERVICES, will not only help address compliance issues, but will also help shipowners, operators and charterers to manage the restrictions on CO2, NOx and SOx production within the context of the bigger commercial picture.

Knowledge basePeter Mantel of BMT SMART discusses how performance monitoring systems can be effective drivers towards vessel efficiency

vessel monitoring



The importance of deploying an independently validated system cannot be overstated. When measuring, validating and benchmarking vessel performance there are a wide range of stakeholders within the supply chain, each with their own vested interests. It’s far too easy for a vested interest to become a con�ict of interest. The most effective way of dealing with this eventuality is to ring-fence the measurement and validation process, keeping it completely separate from any other consultancy or equipment supply arrangement.

The demand for Fleet and Vessel Per formance Management (FVPM) is increasing, as growing numbers of shipowners and contractors realise the bene�ts. The multiple pressures on the global maritime industry mean that shipowners and contractors can no longer afford to ignore the performance of their �eet. However, there is still scepticism within certain elements of the shipping community and some shipowners, operators and charterers are still wary of the value such a monitoring system can deliver.

Perhaps this is understandable, having been used to an environment where Chief Engineers produced miracles on a regular basis, armed only with the data from the dials

in their engine rooms. However, the industry is changing and there is a growing need to deliver stakeholder transparency on top of commercial and regulatory considerations.

Cargo owners, charter companies, banks, investors and insurance companies are increasingly demanding evidence of environmental and operational efficiency commitments when making contract decisions. Shipowners, operators and charterers need to be able to provide independently validated performance results to satisfy their stakeholders.

Arguably, the greatest value that performance monitoring tools like BMT SMARTSERVICES can deliver becomes clear when one looks beyond the bene�t to a single ship on a single voyage.

Once multiple data-sets become available from multiple vessels over a period of time, the information can be used to benchmark performance and drive improvements across a �eet. Key indicators and trends that could lead to a positive change for future voyages can be leveraged, while single parameters that are causing a drop in ef�ciency can be identi�ed and addressed.

Dry-docking for maintenance and renewal of anti-fouling can be

timed to take place just before any rapid drop-off in vessel performance, highlighted by historical efficiency data.

Looking to the future it is not unrealistic to envisage a time when all merchant vessels are equipped with a fully integrated bridge where performance parameters and emissions data are displayed alongside navigation systems and thruster controls.

The combination of more rigorous legislation and harder economic conditions has led to a situation where shipowners and operators need to have easy access to the emissions and performance data for their vessels. Yes, there is still scepticism, but the tide is turning.

The bene�ts of being able to use real-time data to dynamically manage the performance of a �eet of vessels, or choose to analyse and review data over a period of time, to be able to make informed operational and maintenance decisions are hard to ignore.

Peter Mantel, MD BMT SMART Ltd

Tel: +44 1489 889 260 Email: [email protected] Web: www. bmtsmart.com

vessel monitoring



http://www.bmtsmart.com


Maritime transportation, having gone from sail to steam and from coal to oil, is now moving towards

lique�ed natural gas (LNG) as a prime source of energy propulsion and power generation. As the world undertakes a dash for gas and supply, and use becomes more abundant, the maritime industry has an opportunity to leapfrog ever increasing and punitive emissions’ regulation and play a key role in the next stage of evolution of what is fast becoming the most sustainable and cost-effective source of energy.

Whilst it has long been the case that the maritime industry has taken residual fuel oils and used them in an increasingly ef�cient manner, the pressure to reduce emissions through emission control area (ECA) implementation is encouraging the use of alternative fuels – and gas fuel for ships is a very attractive solution in many ways.

There is a vast difference between carrying LNG in bulk on a ship and burning it for propulsive power. Gas is lique�ed to provide transportation ef�ciencies and the cryogenic technicalities are well known and understood. Nearly 50 years of incident-free operations in LNG transportation has proved that the process of authoritative and careful development of guidelines and regulations is the right way to go.

In this day and age, things happen faster and with increasing regularity, and there are many initiatives occurring around the world for regulation of LNG use in almost as many industries. The Society for Gas as a Marine Fuel (SGMF) has been established as a framework organisation that can take the best of what

these industries have to offer. Its ultimate goal is to develop guidelines than can be used by appropriate authorities for standards so that LNG can be safely and more widely used.

Since its instigation in the autumn of 2013, the SGMF has set up shop in the City of London as a wholly separate, but complementary non-governmental organi-sation (NGO) to the others that already exist.

Much as the regulatory bible for LNG transportation has become the IGC code, the IGF code will cover all matters pertaining to the use of LNG on ships as a fuel.

Industry is recognising the signi�cant dif ference in the issues between the two and it is no different when it comes to regulation – the need for the Industry body has never been greater.

With over 50 members joining the society in its �rst 6 months of operation, the rate at which the maritime industry is embracing the issues surrounding the use of LNG as a fuel is growing. There is not a week, or sometimes a day, that goes by without an announcement, event, launch or some activity relating to these issues, and that is something the organisation is coming to grips with.

Getting down to business, the Technical committee has been established in March with a long list of items to address. Formed of individuals from 10 of the founding board members, there are five issues that the committee is focusing upon;• LNG as a marine fuel: safety guidelines• LNG bunkering practice: safe working

distances• LNG on ships: contingencies and issues

for salvage

• LNG as a marine fuel: competence and training standards

• LNG bunkering: quality and quantity Issues.Whilst there are many concurrent

initiatives surrounding regulation, mostly in the European Union (EU) and the United States, it was thought that SGMF would best serve the purpose of its objective by tackling these issues first.

It is hoped to issue the �rst revision of the Safety Guidelines in the summer of 2014 so the group can gain traction and formulate best practice for our industry without compromising on content quality.

SGMF is reaching out to other transpor-tation bodies in road, rail, aerospace and defence to also bene�t the maritime sector with the lessons learned, sometimes the hard way, by those industries.

Full membership is open to all organisations directly involved in the use of LNG as a marine fuel, such as owners, suppliers and users.

Assoc iate membersh ip a lso embraces the wider industry, and includes equipment manufacturers, consultants, shipyards and designers.

Scupper plug…Mark Bell, General Manager of the Society for Gas as a Marine Fuel, outlines the key points on the agenda of its newly-formed technical committee

Mark Bell, General Manager SGMF London Secretariat

Email: [email protected] Web: www.socgmf.org

scupper plug…



http://www.socgmf.org


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A s the green shoots of Spring emerge in the Northern Hemisphere and similarly verdant shoots at last

appear in some sectors of the shipping market, the timing could hardly be better for attention to turn to four major shipping events all geared towards nurturing contacts and growing businesses in the maritime sector.

The annual Connecticut Maritime Associa-tion’s (CMA) Shipping 2014 event took place in mid-March in an ice-cold Stamford, attracting close to 2,000 shipowners, managers, lawyers, regulators, cadets, naval personnel, and an array of maritime professionals, to hear the thoughts of the leading lights of the industry.

One standout performance was by Paul Stebbins (pictured), Executive Chairman of World Fuel Services and now ‘retired’ from bunkering but heavily involved in Washington politics, who shared his insight into the threat that political dysfunction poses to the world at large and the United States in particular. Shipping operations, regulation, the role of the media, lique�ed natural gas (LNG) as a marine fuel and, via a session devised and chaired annually by Petrospot, bunkering, insurance and risk management were also on the agenda at the conference.

Next up is Maritime Week Americas (MWA) (19-23 May) which, in the warmer climes of Panama, will focus on bunkering, particularly in South America, as well as on related issues such as port development and maritime security. MWA traditionally includes the largest and most popular bunkering event in the Americas. Port development, maritime security, risk management, legal issues and the latest news on the Panama Canal expansion project will also be debated.

MWA also includes a variety of training courses and seminars. The International Bunker Industry Association (IBIA), for example, will run its introductory courses in both English and Spanish, while Petrospot will use the occasion to launch its latest book and a training course led by Nigel Draf�n, both entitled An Introduction to Shipping. As is customary at MWA, the Latin American-themed networking will ensure that this event remains top of the list for bunker buyers and suppliers throughout the Americas.

In June, attention shifts from the Americas to Europe, with the return of Posidonia in Athens (2-6 June), an exhibition that boasts over 1,800 stands, including 21 national pavilions, and attracts almost 20,000 visitors. It is Greece’s maritime showcase to the world. Its reputation lies not only in the exhibition and related conferencing events, but also in the extravagant all-night parties that are hosted by some of the biggest names in Greek shipping. Posidonia has made its mark on the global industry and is considered the leading maritime event in Europe, if not the world. It takes place in

even years while Norway’s Nor-Shipping and ‘new kid on the block’, London International Shipping Week, both take place in alternate years, in June and September respectively.

While the huge success of London International Shipping Week may have taken the maritime industry and national governments by surprise in September 2013, a much bigger surprise is likely to be sprung by the advent this summer of the International Festival for Business 2014 (IFB 2014), which takes place in Liverpool during June and July. This UK government-backed initiative is designed to attract business to the United Kingdom, and especially to the Northwest of England, with as many as 250,000 business

visitors expected to attend. IFB 2014 consists of a number of themed weeks, each hosting dozens of events related to �nancial and professional services, higher education, low carbon and renewables, manufacturing, science and technology and other areas.

The Maritime, Logistics & Energy (MLE ) thematic, led by Mersey Maritime and Petrospot’s joint ventures, Shipping Innovation, includes over 50 events, ranging from conferences, seminars, training courses, gala dinners, lunches and a wide range of maritime-related networking events, such as the Liverpool River Festival and other cultural activities.

Among the MLE highlights are the Maritime & Logistics Conference 2014 which will bring together the major stakeholders of freight and cargo movements, including shipowners and charterers, shippers, cargo interests, port and terminal operators, Customs, security and other parties. Another highlight is a conference run by the Tyndall Centre for Climate Change Research and led by the University of Manchester, entitled Shipping in Changing Climates: Provisioning the Future. This will cover low carbon technologies and practices, trade and security, climate impacts on trade routes, ships and ports, low carbon shipping policies and low carbon �nancing.

A long list of specialist training courses will also be offered, covering shipping, surveying, maritime casualties and claims, bunkering, logistics and maritime security. One particularly noteworthy event is the CSI Cybersecurity Lunch Forum which will focus on the increasingly signi�cant problem of cybersecurity in the maritime and port domains, explaining what cybersecurity means in practice and how strategies are being developed and implemented to counter this growing threat.

The IFB 2014, and in particular the MLE themed events, together with the CMA’s Shipping 2014, Maritime Week Americas and Posidonia are the four must-attend super-occasions on offer this spring and early summer. Fittingly, the last of these takes place in Liverpool, home of the Beatles, the original Fab Four.• For more information on these events see

page 78.

Event focus – Fab Four

events



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Nov 02

628

658

657

s/e

991

628.25

658.25964.75-

-

380cSt HSFO6 months

380cSt HSFO1 year

www.mabux.ru

http://www.mabux.com

http://www.mabux.ru

On the move...

Obituary

EUROPE ____________________

A/S Dan Bunkering Ltd has appointed Tina Bild Carr as Management Assistant at the Company’s Middlefart head of�ce. Tel: +45 6441 5401; Direct: +45 6421 5440; Mob: +45 2519 0400; Email: [email protected].

Mathias Berndt has been appointed Managing Director of Bomin Deutschland, in addition to his role as Managing Director at Ostsee Mineralöl-Bunker (OMB) GmbH. Tel: +49 40 3509 3310; Mob: +49 17 23 80 03 68; Fax: +49 40 3509 3116; Email: [email protected]. Meanwhile, Adrian Brosch has been appointed Director Physical Business at Bomin Deutschland and assumes additional respon-sibilities at OMB. Tel: +49 40 3509 3311; Mob: +49 17 23 92 05 77; Email: [email protected].

The Bomin Group has announced that effective 1 May 2014, Thomas Johannsen will join Thomas Roller as second Managing Director of Bomin Bunker Holding GmbH & Co. KG. He succeeds Julio Tellechea, Managing Director Mabanaft GmbH & Co. KG and Executive Board member of Marquard & Bahls AG, who had been appointed Managing Director in December 2013 after the departure of Peter Schreiber. Johannsen has been working for the Marquard & Bahls group since 1991. Following various positions at Oiltanking and Mabanaft, he became Managing Director at Mabanaft Deutschland GmbH & Co. KG in 2008 together with Nikolaus Gehrs. Tel: +49 40 350930; Email: [email protected].

MIDEAST & AFRICA ___________

Christina Pateli has been appointed as a bunker trader at Overseas Petroleum & Shipping LLC in Dubai. Tel: +971 9 237 3000; Email: [email protected].

Dan Bunkering (Middle East) DMCC has appointed Ismail Achmat as a bunker trader in Dubai. Tel: +971 4429 5600; Direct: +971 4429 5605; Mob: +971 527 222216; Fax: +971 4 429 5699; Email: [email protected].

Kayo Dubash, previously a junior of�cer at Maersk and a bunker trader at World Fuel Services, has joined Bomin Oil DMCC in Dubai as a bunker trader. Tel: + 971 4447 7488; Mob: +971 50 43 33 806; Email: kdubash@bomin�ot.ae.

Leonore Lagendijk, previously a trader at OW Bunker Middle East DMCC and BP, has joined Dynamic Oil Trading in Dubai as a bunker trader. Tel: +971 48 181 200; Mob: +971 55 498 7302; Email: [email protected]. Mirko Antichi, previously at Chemoil Mondex’s Monaco of�ce, has also joined as a bunker trader. Mob: +971 52 693 0074; Email: [email protected]. Sheila Oller has joined the company as an accountant. Email: [email protected].

ASIA PACIFIC ________________

Dan-Bunkering (Singapore) has appointed Morten Mortensen as sales manager. Tel: +65 6572 4300; Direct: +65 6572 4312; Mob: +65 8339 2057; Fax: +65 6572 4301; Email: [email protected].

Maria Eliseeva has been transferred to Dan-Bunkering (Singapore) Pte Ltd from A/S Dan-Bunkering Ltd’s Kaliningrad representative of�ce where she has worked since 2008. Tel: +65 6572 4300; Direct: +65 6572 4306; Mob: +65 9821 7770; Fax: +65 6572 4301; Email: [email protected].

Euwyn Tan, previously a shipbroker and bunker trader covering Taiwan and Singapore, has joined Glander International Bunkering in Singapore as a bunker and lubricant trader. Tel:

+65 6275 8861; Email: [email protected].

Katrina Chen, previously with Singapore bunker supplier TransOcean and barge operator Seahub, has joined Global Vision Bunkers (Far East) Pte Ltd as a bunker trader. Tel: +65 6533 0890; Mob: +65 9299 0617; Email: [email protected].

Eura T Kim, previously with Hyundai Corporation in South Korea and with 15 years’ experience in the bunker industry, has joined Total Marine Fuels in Singapore as deputy sales manager and senior bunker trader. Tel: +65 6849 4300; Mob: +65 9018 5778; Email: [email protected].

Ian Zhang has joined Bomin Bunker Oil Ltd’s Shanghai representation of�ce as a bunker trader. Tel: +86 21 63 51 2072/3; Direct: +86 21 5386 3695; Fax: +86 21 6351 3996; Mob: +86 1376 1587 252; Email: [email protected].

AMERICAS __________________

After 14 years as fuel management director at Eastwind Maritime and �ve years as a fuels consultant at Inisfada, Dennis Sears has been appointed Business Development Manager at OW Bunker North America Inc. in Stamford, Connecticut. Tel: +1 203 724 9743; Mob: +1 203 945 7999; Email: [email protected].

Sandi Ennor has resigned from her position as Regional Manager Americas at Integr8 Fuels America LLC in Westport, Connecticut.

Bunker veteran John Colliton, Managing Director of Sea Marine Fuels, a Cockett Marine Oil US subsidiary, since 2012, has retired from the industry. He was a Director at Glander International before becoming President of Sea Bunkering Americas LLC in 2000 and then moving to Sea Marine Fuels in Palm Beach Gardens, Florida.

Constant (Stan) Verdonck, for many years one of the most well-known �gures in the bunkering and shipping communities, particularly in Belgium and the Netherlands, succumbed to cancer and died on 9 February, aged 61. Stan joined Wiljo NV in Antwerp in 1973 and was appointed Managing Director in 1984, later becoming Chief Executive Of�cer as the business and its subsidiaries expanded. He will be remembered as an extremely warm, gentle family man as well as a professional and vastly experienced businessman who led Wiljo to become Belgium's largest independent bunker supplier.

Constant Verdonck

networking











Bunkerspot captures some memorable moments in Australia, London and Connecticut…

bunkerspotted...

Petrospot’s Sally Unwin gains some onboard experience in Sydney, Australia

Paul Dyke listens to former IBIA Chairman Antonio Cosulich at the IBIA Dinner

Meet Jens Maul Jørgensen of Oldendorff Carriers GmbH & KG, IBIA’s new Chairman

If the hat �ts…Robert Bugbee, President of Scorpio, elected CMA Commodore 2014

KPI Bridge Oil’s Jesper Rasmussen entertains Topoil’s Yvonne Rittfeldt in London

American pie: Glander’s Mike Camarata and Louis Glass of Multi Service-KHI lunch out with Dan-Bunkering in London

Christian Kint of Oilchart discusses short deliveries with Goris Vermeulen of Bunker Experience

KPI’s Lina Malfetas is sandwiched by Amoil’s Peter Syrris and Bez Ramini at Dan-Bunkering’s reception during IP Week

Masamichi (Matt) Morooka, President of NYK Bulk & Project Carriers and Chairman of ICS, at the CMA in Connecticut

bunkerspotted...



APRIL _____________________CHINA: Intermodal Asia1-3 April, ShanghaiContact: Sophie Ahmed, Event Director, InformaTel: +44 2070 175 112Email: [email protected]: www.intermodal-asia.com

DENMARK: The 35th International Bunker Conference2-4 April, CopenhagenContact: Hilde Spaeren, Project ManagerTel: +47 464 102 17Email: [email protected]: www.bi.edu/ibc

SINGAPORE: The Oxford Bunker Course (Advanced)7-9 April, SingaporeContact: The Petrospot Events TeamTel: +44 1295 814 455Email: [email protected]: www.petrospot.com

SINGAPORE: Asia Paci�c Barge Conference7-9 April, SingaporeTel: +65 6508 2401Web: asiapaci�cbarge.com

GERMANY: Global Liner Shipping Conference9-10 April, HamburgTel: +44 207 017 5510Email: [email protected]: www.globallinershipping.com

CHINA: China International Marine, Port & Shipbuilding Fair9-11 April, NanjingWeb: www.ChinaInternationalMarinePort andShipbuildingFair

UNITED KINGDOM: LNG & CNG For Transport Forum9-10 April, LondonTel: +44 207 017 5518Email: [email protected]: www.ibcenergy.com

SINGAPORE: Bunkerspot LNG: An Introduction to LNG Bunkering10 April, SingaporeContact: The Petrospot Events TeamTel: +44 1295 814 455Email: [email protected]: www.petrospot.com

UNITED ARAB EMIRATES: Tank World Expo14-15 April, DubaiWeb: www.tankstorageforum.com

UNITED STATES: LNG Export USA 2014: Global Buyer Congress29-30 April, HoustonWeb: www.lng-export-usa-2014.com

CANADA: Canadian Frac Sand Logistics & Market Forecast Summit29-30 April, CalgaryTel: +44 800 098 8489Email: info@london-business-conferences. co.uk

MAY _______________________NETHERLANDS: BunkerExperience12-15 May, RotterdamContact: Goris VermeulenTel: +32 484 168 780Email: [email protected]: www.bunkerexperience.com

UNITED KINGDOM: The Oxford Bunker Course12-16 May, OxfordContact: The Petrospot Events TeamTel: +44 1295 814 455Email: [email protected]: www.petrospot.com

UNITED STATES: Tugs & Barges 201413-14 May, StamfordTel: +1 212 620 7208Email: conferences:sbpub.comWeb: www.marinelog.com

PANAMA: Maritime Week Americas 201419-23 May, PanamaContact: The Petrospot Events TeamTel: +44 1295 814 455Email: [email protected]: www.petrospot.com

NETHERLANDS: Platts European Bunker Fuel Conference22-23 May, RotterdamWeb: www.platts.com/europeanbunker

JUNE ______________________GREECE: Posidonia 20142-6 June, AthensTel: +30 710 428 3608Email: [email protected]: www.posidonia-events.com

UNITED KINGDOM: Maritime, Logistics & Energy (International Festival for Business)9-20 June, LiverpoolContact: The Petrospot Events TeamTel: +44 1295 814 455Email: [email protected]: www.petrospot.com

UNITED STATES: 2nd LNG Marine16-18 June, HoustonContact: Andrew York, FC Gas IntelligenceTel: +44 207 375 7507

Email: [email protected]: www.offroadnaturalgas.com/marine index.php

SEPTEMBER ________________TURKEY: Black Sea Ports & Shipping3-4 September, IstanbulWeb: www.transportevents.com

UNITED KINGDOM: London International Shipping Week 2015 – Launch Reception11 September, LondonContact: The Petrospot Events TeamTel: +44 1295 814 455Email: [email protected]: www.petrospot.com

UNITED KINGDOM: The Oxford Bunker Course15-19 September, OxfordContact: The Petrospot Events TeamTel: +44 1295 814 455Email: [email protected]: www.petrospot.com

OCTOBER __________________BELGIUM: The Bunkering Symposium1-3 October, AntwerpContact: The Petrospot Events TeamTel: +44 1295 814 455Email: [email protected]: www.petrospot.com

COLOMBIA: TOC Americas 201414-16 October, CartagenaContact: Paul Holloway, Event DirectorTel: +44 2070 174 394Email: [email protected]: www.tocevents-americas.com

NOVEMBER ________________CANADA: Tank Storage Canada5-6 November, CalgaryContact: Sharé MasonTel: +44 208 843 8819Email: [email protected]

DECEMBER _________________UNITED ARAB EMIRATES: TOC Container Supply Chain Middle East9-11 DecemberContact: Paul Holloway, Event DirectorTel: +44 20 7017 4394Web: www.tocevents-me.com

Diary

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

Tel: +44 1295 814455Email: [email protected]

conference diary

Bunkerspot April/May 201478 www.bunkerspot.com


http://www.intermodal-asia.com


http://www.bi.edu/ibc




http://www.globallinershipping.com

http://www.ChinaInternationalMarinePort


http://www.ibcenergy.com



http://www.tankstorageforum.com

http://www.lng-export-usa-2014.com


http://www.bunkerexperience.com



http://www.marinelog.com



http://www.platts.com/europeanbunker


http://www.posidonia-events.com




http://www.offroadnaturalgas.com/marine

http://www.transportevents.com








http://www.tocevents-americas.com


http://www.tocevents-me.com



ENVIRONMENTAL FRIENDLY BUNKERING

Typical:

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0706 bunkerspot v6i6.indd 63 02/12/2009 16:06

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