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Inside:• Fuel Saving Technologies• Regulations Update• Coping with Low Sulphur Fuels• Emissions Monitoring• LNG Developments• Market Trends• People and Places• News and Events

INDEPENDENT INTELLIGENCE FOR THE GLOBAL BUNKER INDUSTRY

GOING GREEN:Shipping meets the challenge

www.bunkerspot.com Volume 8 Number 3 June / July 2011

bunkerspot June / July 2011 www.bunkerspot.com 3

FEATURES

COMMERCIAL ISSUESChris Thorpe argues that knowing when to strike is a key factor for success when playing the markets or organising public offerings 18

LNG DEVELOPMENTSTorben Skaanild, Secretary General of BIMCO, offers a balanced consideration of the possibilities and challenges presented by a wider use of LNG as a marine fuel 22

FUEL QUALITYDafni Lionaki considers how international regulations and legislation affects bunkering practices and fuel quality 26

BUNKERSPOT WORLD MAPGlobal prices and news at a glance 28

PORT INITIATIVESThe Port of Gothenburg recounts how a unique collaboration between stakeholders has resulted in a smorgasbord of environmental initiatives 30

EMISSIONS MONITORINGSimon Brown of W R Systems looks at how the maritime industry is evolving under the raft of new emissions regulations 32

FUEL SAVING TECHNOLOGIESKatia Kardash of the DK Group argues that demand for fuel savings can drive clean technology take-up ahead of regulation 36Rolf Hasselström maintains that ships can achieve major fuel savings through the use of waste heat recovery technology 38

FUEL MANAGEMENTAllan Ashby of Braemar Falconer looks at how effective fuel management can help to cut costs 40

COPING WITH LOW SULPHUR FUELSRalph E. Lewis considers whether refiners can step up their processing capacity to meet the huge increase in demand for low sulphur fuel that will be necessitated by emissions regulations 42

BUNKER PEOPLEColin Holloway believes that moving from the technical side of the bunker business to become a bunker trader has broadened his perspective of the industry 46

EDUCATION AND TRAININGTwo new books published by Petrospot provide further valuable insights into the multi-faceted and complex marine fuels industry 48

EVENTSLlewellyn Bankes-Hughes looks back at one of the most successful bunkering events ever held in the Americas 51Delegates at a recent Petrospot seminar in Singapore considered whether LNG could be the marine fuel of the future 52Events and training course diary 53

NETWORKINGBunker people on the move 54

Contents

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

Bunkerspot is an integrated news and intelligence service for the international bunker industry. The bi-monthly magazine and 24/7 electronic news service, www.bunkerspot.com, both provide highly-specific information on all aspects of the marine fuels industry. Bunkerspot Magazine (published in February, April, June, August, October and December) annual subscription rate, including unlimited access to the website www.bunkerspot.com, is UK£250/€280/US$400. ISSN 1741-6981. Copyright Petrospot Limited © 2011. All rights reserved. Published by Petrospot Limited, a dynamic independent publishing, training and events organisation, focused on providing information resources for the transportation, energy and maritime industries. 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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NEWS Bunker Overview 4Europe 8Asia Pacific 12Americas 14Africa and Mideast 16

June / July 2011 bunkerspotwww.bunkerspot.com4

Bunker Overview

Is it time for shipping to play the green card?There’s a clear theme running through this issue of Bunkerspot – and to hammer the point home, we have even spelt it out on the front cover. The maritime industry is ‘going green’ and rising to the challenge of environmental legislation.

Of course, not everybody is happy about this. There is still a hard core of sceptics who dismiss the warnings about global warming and acid rain as the ravings of politically-motivated ‘eco-mentalists’ – but, like the polar ice caps, these pockets of resistance are melting away.

More importantly, there are many in the bunker industry who, while accepting that steps must be taken to address the issues of emissions and fuel conservation, warn that we must follow a path dedicated by our heads, not our hearts. Eco-enthusiasm has to be tempered with an understanding of what is possible: goals must be realistic, targets achievable and objectives must not run counter to the needs of business.

12 month rolling price charts

One of the questions most frequently asked about a mandatory switch to cleaner fuel is: ‘Will our refineries be able to cope with the expected surge in demand for low sulphur fuel oil (LSFO) and distillates?’ Ralph E. Lewis investigates the issue on page 42 and – the title, Rough seas ahead, rather gives the game away – he expects that there will be problems ahead. In Europe, Ralph was ‘alarmed’ to find that ‘a number of older, less efficient refining units are being offered for sale, or are being completely scrapped over the next few years’. Ralph adds that ‘while some expansion plans are underway, there is virtually no planning for new refineries in the region’.

On the whole, Ralph concludes that ‘the jury is still out’ over whether the deadlines on emissions control can be met. However, to continue the courtroom theme, most expert witnesses agree that it won’t be a simple matter of ships switching from a high to a low sulphur fuel, and then carrying on as before. Exhaust gas scrubbers will play their part in easing the

process – but the key thing is that shipowners will have to embrace new technologies and ship designs that will improve their vessels’ fuel efficiency.

We have showcased some of these technologies in this issue of Bunkerspot. Katia Kardash writes about the DK Group’s Air Cavity System (ACS) on page 36. According to Katia, this ‘air lubrication technology’ can be retrofitted to ships in a two-week drydock and delivers fuel savings of around 10%. On page 38, Rolf Hasselström extols the benefit of Opcon’s Powerbox – which generates fuel savings through waste heat recovery. In both cases, the rationale is that better fuel utilisation leads to both cost savings and lower emissions. In other words, the interest of business and environmental protection can be yoked together. It can actually pay to be green.

And that is the message that the Port of Gothenburg is keen to send out to the shipping community. On page 30, the Scandinavian

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Bunker Overview

port authority outlines the steps it has taken to incentivise shipowners to use cleaner fuels and take advantage of its trailblazing cold ironing system.

The Port of Gothenburg has been a strong supporter of using liquefied natural gas (LNG) as a marine fuel. As we report on page 10, there has been a hiccup with the LNGGot programme recently, following Gasnor’s decision to withdraw from a cooperative agreement with the Port of Gothenburg and Gothenburg Energy. However, the project is continuing and the interest in LNG – both in Scandinavia and worldwide – is building.

In April, Petrospot Ltd (the publisher of Bunkerspot) hosted a seminar in Singapore which considered whether LNG could be the ‘future fuel for shipping’. As we report on page 52, the consensus opinion at the seminar was that there was light at the end of the LNG tunnel, ‘but that light is very dim at the moment’. We might also add that the tunnel is likely to be a long one. Writing on page 22, Torben Skaanild, Secretary General of the Baltic and International Maritime Council (BIMCO)and the keynote speaker at Petrospot’s Singapore event, points out: ‘Even if LNG becomes more attractive to shipowners, there are still significant challenges. There are numerous stakeholders involved, and there is the entire regulatory arena, which needs to familiarise itself with the safe bunkering and the use of natural gas onboard ships.’

So, there are challenges; but what can’t be said too often is that shipping is making an effort to meet those challenges and, even more importantly, it is making progress.

Every now and then – usually when there has been an oil spill – the general media comes into contact with the marine fuel industry. It then reports with horror that ships run on a black, viscous gloop called bunker fuel and spew sulphurous fumes from their funnels. The truth, of course, is that shipping is by far the most fuel-efficient – and therefore ‘green’ – way to move international cargo. And the proactive efforts of ports like Gothenburg and its many stakeholders show that the maritime community is serious about becoming even more environmentally clean in the future.

380 IFO March April May21-25 28-01 04-08 11-15 18-22 25-29 02-06 09-13 16-20 23-27

Rotterdam d 608 615 651 656 652 652 638 615 611 612Gibraltar d 632 639 668 670 660 664 664 647 645 636Piraeus d 619 632 656 659 649 662 664 635 628 634

Suez d 655 661 679 700 692 697 719 709 697 706Fujairah d 639 647 678 685 674 679 677 647 640 641Durban w n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a

Tokyo d 685 693 715 723 731 728 727 702 690 676Busan d 653 665 698 707 693 692 706 705 684 666Hong Kong d 647 654 684 692 687 689 679 658 649 646Singapore d 630 640 675 675 661 669 651 633 630 630

Los Angeles w 659 688 716 689 696 688 690 667 650 639Houston w 617 636 663 665 657 658 665 633 624 617New York w 634 651 677 688 676 679 673 633 632 638

Panama w 664 676 694 695 685 693 695 669 655 642Santos d 637 599 634 680 693 692 690 653 624 624Buenos Aires d 648 647 658 665 669 682 687 698 698 696

180 IFO March April May21-25 28-01 04-08 11-15 18-22 25-29 02-06 09-13 16-20 23-27


Suez d 672 680 702 713 700 702 737 762 720 739Fujairah d 671 675 707 710 702 707 701 677 667 670Durban w 651 649 672 686 662 645 699 689 669 669




MDO March April May21-25 28-01 04-08 11-15 18-22 25-29 02-06 09-13 16-20 23-27


Suez d 1004 1019 1034 1071 1075 1097 1094 1062 1076 1091Fujairah d 988 994 1029 1044 1049 1046 1045 1034 1032 1010Durban w 1007 1008 1036 1065 1035 1050 1072 1031 971 980




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

GLANDER

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


Chris Thorpe argues that knowing when to strike is

a key factor for success when playing the

markets or organising public offerings

Markets don’t act predictably and often people in those markets do not act rationally. There

are too many biases and inefficiencies that exist throughout the economy. The good news is that opportunities are borne from inefficiencies in the markets, no matter if you are financing a new project, taking your company public or hedging your next fuel delivery. The bad news is that identifying when the market is good for you is not easy and is often influenced by bias and ‘group think’ or inconsistent framing of the issue. As a result, luck plays a large part of whether business decisions look good or bad in hindsight. Can senior business managers reduce the importance of luck by identifying market opportunities and acting on them at the right time? For those exposed to financial markets and commodity risk, the best managers know when to identify opportunities and when to consistently strike the best deal.

Natural resource industries such as oil, gas and mining have a very long investment cycle, often requiring several years to return a profit. Through forecasting, investors take capital risk with some expected return. These forecasts are highly dependent on price expectations of inputs and sales projections for finished goods. Despite this dependency, costs are not usually fixed, or hedged, because revenue is not yet known. So luck becomes the greatest factor whether a business is profitable or not. And of course entrepreneurs appear luckier when they use the best analysis, technology and practices. One common utterance from successful entrepreneurs is: ‘The harder I work, the luckier I am.’ Though this seems true, the real skill is to reduce the luck factor by spotting an opportunity to secure profits and maintain them for long periods of time.

Financial markets pose an interesting example of timing and luck. For years, financial managers have diversified foreign exchange and interest rate risk, effectively reducing the market risk of global and local economic cycles. For example, a Japanese company selling cars in the United States would typically hedge its dollar-yen risk for a period of time to cover the cash flow back to Japan from sales expected in the US. Similarly, Canadian corporations have typically issued debt in US dollars to US investors to access deeper pockets of capital when Canadian markets did not provide necessary depth or liquidity. In tandem with the offering, US dollar liability would be hedged forward to ensure the costs of foreign debt did not

increase in Canadian dollar terms over time. Though often foreign exchange and interest rate risk is systematically hedged for cash flow risk management, these hedges are not always executed without bias, speculation or respect for an extreme change in the market.

Take the case of Aracruz Cellulose, a Brazilian company that regularly hedged its dollar exposure, which is common for any Brazilian business dependent on exports. Aracruz had grown to become one of the largest global producers of commodity pulp used for paper products based on its low cost of production in Brazil. In Aracruz’s case, hedging had been consistently successful for years following the election of President Lula da Silva in 2002 as the Brazilian real trended higher. As it continued to play the trend of the currency, it hedged beyond the value its actual export sales revenue, thereby creating a speculative position. Then luck ran out. When the financial market collapsed in 2008 and the dollar spiked, Aracruz suffered losses of $2.13 billion due to its currency hedges. The mistake contributed to the eventual sale of the company at a steep discount to its value prior to the hedging loss. In this case, management had correctly identified the opportunity to hedge, but eventually fell into the trap of overestimating its skill based on its previous luck. Time eventually exposed the error.

On the opposite side of this foreign exchange example is Nestlé, which recently reported a decrease of 10% in sales for the first quarter of 2011 primarily due to the stronger Swiss franc. Nestlé does not actively manage its currency exposure, arguing its business is globally diversified. Despite this, sharp swings in the Swiss franc have had a dramatic impact on financial results. Ironically, Nestlé and its global peers all actively hedge commodity exposure in areas such as sugar, cocoa, coffee and even fuel. And the strategies used to hedge commodities are actually very similar to those used to hedge currency save for the effects of interest. Often the divergence in hedging philosophy is overlooked.

In public capital markets, investment commitments tend to be long-term. Equity

Strike forceCommercial Issues

Chris Thorpe is a Managing Partner with HCEnergy LLC HCEnergy is a business unit of INTL FCStone Inc., providing customers with execution and advisory services in commodities, capital markets, currencies and asset management.

Contact: Chris Thorpe HCEnergy LLC Tel: +1 212 774 5963 Email: [email protected] Web: www.hcenergy.com

‘Natural resource industries such as oil, gas

and mining have a very long investment cycle, often requiring several years to return a profit’


investors have no certain payback period while bond investors have defined redemption periods or maturities of their investments. When issuing new equity or debt, financial managers need to think about the current market conditions, implied costs of capital and terms that investors demand. When a company has a strong business outlook and strong financial position, it may achieve better terms when borrowing or issuing new equity. Furthermore, demand for investment products can influence the kind of terms available for borrowers. For example, when demand for debt paper is high, borrowers can negotiate callable bond features, which allow them to refinance on their own terms at a favourable rate. It can be argued that now is a terrific time to issue new debt in public capital markets, since interest rates are low and spreads – the difference between corporate rates and government rates – are narrow. On the other hand, companies with a less than optimal capital structure may be choosing to issue new equity as global markets continue to support new public offerings. Following the dramatic impact of the financial crisis in 2008 on equity and bond issuance, 2011 has proven to be a banner year for initial public offerings (IPO) and debt issuance. It is not surprising that large private commodity focused players such as Glencore have elected to tap the equity markets while investors remain hungry for new opportunities in the commodity space.

The market timing argument can easily be made in commodities as well. Since tools exist that allow financial and commercial managers to lock in prices for months to several years, they can be compared to the bond markets which lock in the price of borrowing for a fixed period. In fact, locking in commodity prices as a fuel consumer could hedge against inflation similar to locking in the interest rate of a bond.

Commodity markets that have higher prices in the future are considered ‘normal’ because they include the cost of purchasing the product financially, storing it and insuring it. Yet markets are not always normal, and can actually be priced lower in the future.

Looking at the broad oil markets currently, it could be argued that price range in the future could be very wide. With Brent crude oil well over $120 a barrel, a $10 move in one week wouldn’t be extraordinary. In fact, the market is currently pricing options as if crude oil will trade in a band of $30 higher or lower over the next year.

This pricing is known as ‘implied volatility’, where buyers and sellers agree to trade options based on expected moves in the

commodity price. When the implied volatility is low, options buyers can take advantage of the market conditions the same way a financial manager would issue debt when interest rates are low and credit spreads are narrow. What is interesting about commodity markets, and especially those based in US dollars, is they in themselves are a hedge against a depreciating greenback.

Hedging in fuel commodities tends to be more sporadic and atypical within and between industries.

In the shipping industry, fixed rate charters are more typically hedged than spot market vessels. At first glance, this approach appears sound, but upon more detailed analysis it does not make sense to remain completely unhedged since the spot vessel market pricing can be weak despite the costs to ship owners.

In the cruise line industry, there seems to be no typical fuel hedging within the sector. While Royal Caribbean Cruises hedges consistently, its rival Carnival does not. Despite the possibility of passing through all costs to the customers, it is often not commercially competitive for Carnival to do so. Other transportation companies in the marine and road industries face a similar quandary. The difference in philosophy may or may not be significant in terms of which will be successful. Strategic analysis of industry competitiveness by Harvard Professor Michael Porter suggests that luck has as much as 40% impact on explaining profitability, with industry and business unit effect each under 20% respectively. Knowing luck has so much impact on business, isn’t reducing the luck factor even more important?

Natural gamblersWhile there is no shortage of currency or commodity expert forecasts, business managers shouldn’t take strong views when it comes to hedging. They ought to leave the directional guessing to natural gamblers like hedge funds and trading houses. For commercial business, luck has far too much impact on business profitability. If nothing else, being able to have some planning certainty is worth the trouble when it comes to hedging especially when an opportunity can be secured with known input costs or revenues. When the market creates unexpected opportunities, being prepared to act on disparities in price can be the key to longer lasting profits. A hedging strategy that is part of reducing uncertainty to achieve a set of goals is easier to understand and more effective. With some luck, a well hedged business plan will be more profitable.

Commercial Issues

‘It is not surprising that large private commodity

focused players such as Glencore have

elected to tap the equity markets while investors remain hungry for new

opportunities in the commodity space’ ...Karen, Katie Miwako and Julie Sans

can’t wait for their colleague’s return from his holiday...


Since its invention in 1897 by Rudolf Diesel, the marine diesel engine has proved to be powerful, reliable

and efficient. However, in spite of the significant improvements made over time to these engines’ exhaust systems, regulatory bodies’ zero tolerance in respect of air emissions will dictate change.

The emission of sulphur oxides (SOx), nitrogen oxides (NOx), particulate matter (PM), unburned hydrocarbons and carbon monoxide in exhaust gas will no longer be tolerated. This is clearly reflected in the North European Emission Control Areas (ECAs) and probably more so in the US/Canadian ECA that will require a switch to expensive low sulphur fuels from August 2012. The initial requirement is for fuel with 1.0% sulphur content, which is expected to add around $50 per tonne to the usual cost of heavy fuel oil (HFO).

From 2015, compliant fuel will have a sulphur content of 0.1% and thus the change to gasoil and a subsequent much higher cost. It is this particular development that has given a boost to liquefied natural gas (LNG) as a potential future marine fuel. It is odourless, colourless, non-corrosive and non-toxic. However, when extracted from underground reserves, this natural gas is composed of approximately 82% methane. During the liquefaction process, ethane, propane and heavier hydrocarbons as well as small quantities of nitrogen, oxygen, carbon dioxide (CO2), sulphur compounds and water are removed, purifying the fuel and increasing its methane content to about 95%, and sometimes even more.

As a result, LNG-fuelled engines can offer significant emissions benefits compared with traditional diesel-powered engines, but the methane is a problem for global warming as it is lighter than air and will evaporate into the atmosphere.

Some diesel engine manufacturers are already saying that for ship propulsion technology the future is gas. LNG cargo boil-off was originally used as a fuel by LNG carriers on the cargo leg to utilise the otherwise wasted boil-off that occurs to keep the cargo cold and the liquid at atmospheric pressure. A cargo ‘heel’ was often kept for the ballast leg, normally to have the tanks cooled down ready for loading, but also, depending on fuel prices, as a cheaper alternative to fuel oil for the boilers.

The modern dual fuel engine concepts were invented to take advantage of the superior fuel efficiency of the diesel engine and it wasn’t until 2002 that the world’s first

Torben Skaanild, Secretary General of BIMCO, offers a

balanced consideration of the possibilities and

challenges presented by a wider use of LNG as a

marine fuel

LNG-powered cargo vessel, Viking Energy, came into service. The vessel was powered by a dual fuel system enabling the use of either LNG or liquid fuel. The number of LNG-fuelled cargo ships has increased since then and over 20 ships are now in operation with a similar number on order, spanning a variety of ship types and engines. Apart from LNG carriers, the majority of LNG-fuelled ships currently operate in Norway and are primarily smaller ships in local trade.

The surfacing of LNG as an alternative marine fuel is not only motivated by regulatory or environmental requirements; cost is a major factor because LNG is in fact now cheaper than traditional marine fuels.

However, the use of LNG is not without its problems. One challenge is to contain safely the liquid gas fuel which cannot be merely pumped into conventional fuel tanks as it needs to be stored at -165˚C or at near atmospheric pressure or partially pressurised at a correspondingly higher temperature. This requires fuel tanks to be made from special alloys and to be thermally insulated and separated from any ship structures – an expensive element of the LNG fuel concept.

The space needed for the fuel tanks also presents challenges as they occupy more cargo space than conventional fuel tanks and thus further reduce a ship’s cargo payload. Alphaliner has tried to estimate the amount of space required on a 20,000 twenty foot equivalent unit (TEU) vessel plying at a commercial speed of 21 knots on a full Far East-Europe rotation. It estimated that the additional space required would be around 42,000 cubic metres (m3), because the LNG tanks have to be surrounded by a thick insulated barrier and the tanks are positioned on the inner side of the ship’s structure.

Although this figure has not been officially confirmed, it does illustrate one of the principal concerns about using LNG as a marine fuel. For a very large crude carrier (VLCC) space may perhaps not be a problem. In DNV’s VLCC concept, Triality, the tanks have been placed on the cargo deck, 10 metres (m) from the side of the ship and their outside insulation is protected by the surrounding deck houses. Two 6,750 m3 LNG tanks have a fuel capacity for 25,000 nautical miles (nm), sufficient for a Gulf-United States round trip.

However, with probably the youngest global fleet ever, a wide-scale, very difficult and expensive retrofitting of existing ships, involving extensive modification to engines and installation of LNG storage tanks, is not likely. For existing vessels, a more likely solution, at least in trying to combat

Fuel for thoughtLNG Developments

Torben Skaanild has had a long career within the shipping industry having held executive positions in Canada, the Philippines, Thailand and Hong Kong, before returning to Denmark to join BIMCO in 1981 as Deputy Secretary General. In 1984 he was appointed Secretary General of BIMCO and left in 1991 to join Dr Helmut Sohmen and the World-Wide Shipping Group (now BW Group), Hong Kong, as a Director.On his return from Hong Kong, he founded Skaanild & Partners, engaging in various advisory and investment projects. In 2008, Torben returned to his old position as Secretary General of BIMCO and Chairman of the Board of BIMCO Informatique A/S.

ContactTorben SkaanildTel: +45 46 36 68 39Email: [email protected]: www.bimco.org



LNG Developments

the problem of SOx, would be to retrofit scrubbers. The issue with scrubbers is not so much one of investment, but rather the problem of waste disposal. With current prices for HFO at well over $600 per tonne and for marine gasoil (MGO) at well over $900 per tonne, the significant differential between the prices for these fuel grade may bring payback on the installation of scrubbers to as low as 18 months. However, waste disposal may continue to be a problem due to the lack of reception facilities around ports.

Another problem is the logistics of bunkering LNG and the provision of bunkering facilities. At present, there are only a few LNG bunkering facilities outside Northern Europe. Technically, it is feasible to bunker from LNG storage tanks onshore or directly from an LNG feeder or bunker barge. However, the lack of an infrastructure for such bunkers does temper the enthusiasm for LNG. While LNG as a fuel may have its attractions, the investment required is significant. It probably isn’t realistic to assume that shipowners will invest in LNG-powered engines until a cost effective bunkering infrastructure is in place. It is probably similarly unrealistic to expect that someone would wish to invest in bunkering facilities until an adequate number of ships are available to use them.

The problem must be addressed by the regulators as more ECAs are introduced. In fact the European Union (EU) is already considering the regulation of the use of LNG for coastal trade within Europe. It is highly likely that ferries, passenger ships and, probably, offshore support vessels in the North Sea will be the first to use LNG-powered engines on a larger scale as their trading routes are fairly short and pre-scheduled and bunkering facilities can be more easily set up around these services.

However, Singapore is set to be a major player in the use and distribution of LNG and is being urged to develop LNG bunkering facilities to protect its position as a leading bunker port. It is a fact that the long-term diversification of services, including bunkering facilities, have been considered in connection with the new LNG terminal currently under development on Jurong Island which is expected to be operational by 2013.The Maritime and Port Authority of Singapore (MPA) also acknowledges the significant benefits of LNG as a fuel for ships in the short sea and coastal trades.

It has been suggested that the growth of LNG as a fuel for ships will be incremental, as brave designers and courageous owners recognise that this innovation has the potential

to address so many different environmental hurdles currently facing the shipping industry. Almost certainly, the use of these ships will be concentrated geographically in areas where there is a strong pressure for shipping to reduce its environmental footprint. The Baltic and the North Sea, for example, are, firstly, close to sources of LNG fuel and, secondly, more advanced than many parts of the world in their regulatory conviction that demands a greater control of emissions.

Furthermore, this is an area where the users of such ships may demonstrate fewer objections to paying a higher price for marine transports compared to those in less developed regions. It is likely that the users of shipping in these areas may have a strong environmental ethos and imperative to demand and maintain greener transport.

It is notable that a number of senior personnel in classification societies are adding their weight to those who indicate that the LNG future may be rather nearer than some might have suggested. The difficulties of meeting emission targets as these become progressively more onerous, coupled with cost issues, are clearly acting as a spur to look more closely at LNG. However, NOx, albeit greatly reduced with LNG fuel, continues to be a problem.

If LNG is indeed to be a fuel of the future, this future is, of course, relative to the perspective that one may have. However, for newbuildings there is certainly potential for all types and sizes of ships, from small coasters to ultra large container ships and VLCCs. So if we say that the average age of ships today is around 10 years, and their life cycle on average is 25 years, we need to look at a scenario around 2025.

Some commentators are predicting that in 2025 LNG will represent perhaps less than 10% of marine fuel. They argue that that the obstacles to the use of LNG, in particular the lack of bunkering facilities, will mean that investment in dual fuel engines for new ships will not be significant. However, this situation could change when ordering picks up again, when ECAs become more widespread and when the cost of LNG is so much more attractive than distillates – and even HFO.

Recently, DNV introduced a new boxship design, based on the gas-fuelled two-stroke ME-GI main engine from MAN Diesel and Turbo. The new ship is designed for a maximum speed of 22 knots, and can, in addition to removing SOx and more, cut CO2 emissions by as much as one third, The engine design will allow for waste heat recovery and exhaust gas recirculation that is likely to rank it as the most energy

efficient and environmentally friendly engine available in the market-place today. The cost of such an engine would be in the region of $200 per kilowatt (kW), making it 10%-15% more expensive than a conventional engine. However, depending on the future cost of fuel, this additional cost could be recouped by fuel and other cost savings with a timeframe of 5-7 years.

Even if LNG becomes more attractive to shipowners, there are still significant challenges. There are numerous stakeholders involved, and there is the entire regulatory arena, which needs to familiarise itself with the safe bunkering and the use of natural gas onboard ships. The true emission facts relating to LNG need to be identified by both national and international environmental organisations, and LNG suppliers also need to resolve infrastructure issues.

The EU has already commissioned a feasibility study to address a number of issues about the use of LNG as a marine fuel. One of these issues is, of course, safety, as seen from the perspective of the vessel, the port and the LNG provider. Mandatory regulations are on their way in the International Maritime Organization (IMO), and classification societies have developed, and are in the process of developing, class rules for LNG-fuelled ships.

Draft guidelines for ship-to-ship transfer (STS) are under development by the Swedish Maritime Technology Forum in cooperation with Class. However, safety regulations for land-based LNG filling stations are currently unclear.

Another aspect relating to infrastructure concerns the approval process of land use and safety measures, decisions over which often rest with local municipalities. In many EU Member States, the public will also be involved in the approval process; the public is an important stakeholder and public awareness is closely connected to safety concerns. The move from a highly specialised LNG industry with large terminals and vessels towards a more decentralised industry will create a new situation for local municipalities as well as for the public. So risk and safety are issues that should and will be addressed with and by all stakeholders.

In any event, the feasibility study should result in recommendations to shipowners, ports, LNG providers, Member States and the EU in respect of all the elements involved in the creation of a safe and proper framework for a supply infrastructure and the use of LNG as a marine fuel. It should also provide a clearer view of the level of investment required.


Dafni Lionaki considers how international

regulations and legislation affects bunkering

practices and fuel quality

Over the past few years, increasing environmental concerns have given rise to stricter legislation

imposed on the global maritime industry to operate on low sulphur content fuel and further reduce sulphur oxide (SOx) in air emissions.

The latest European and Californian regulations are coming into play alongside the International Maritime Organization’s (IMO) MARPOL: Annex VI. The IMO’s regulation imposes a global 4.5% fuel sulphur cap as well as a maximum sulphur limit of 1% in the Emission Control Areas (ECAs), which currently covers the Baltic Sea and the North Sea, including the English Channel. In addition to that, a 0.1% fuel sulphur limit is required for all the vessels at berth or operating on inland waterways at European Union (EU) ports.

According to the California Air Resources Board (CARB) regulation, ocean-going vessels’ propulsion and auxiliary diesel engines as well as their auxiliary boilers will have to use cleaner marine fuels when operating within the 24 nautical mile (nm) regulatory zone off the California coastline. When in this zone, vessels should switch to using marine gas oil (MGO) with a sulphur content no greater than 1.5%, or marine diesel oil (MDO) with a sulphur content no greater than 0.5%. This regulation is expected to be terminated with the enforcement of the North American Emission Control Area in August 2012, at which point all vessels sailing within 200 nm will have to use fuels with sulphur content according to the MARPOL Annex VI ECA limits.

Further to the above regulations, more North American ports are trying to incentivise the shipping community to switch voluntarily to low sulphur distillates. The upcoming further reduction in the global sulphur cap to 3.5% on 1 January 2012 and the reduction of the ECA limit to 0.10% on 1 January 2015 are alarming to the marine industry. Considering the fact that the result of a survey conducted by DNV Petroleum Services (DNVPS) for the period of July 2010 to March 2011 indicates that 10% of heavy fuel oil tested had a sulphur content of above 3.5%, it will be interesting to see how the availability and, more importantly, the quality of the fuel will be affected. As fuel quality trends are proved to be affected by sulphur regulations, what is now the impact of the stricter regulations on low sulphur heavy fuel oil and MGO quality and what might be coming to the fore in the future?

A great challenge to vessel operators is the catalytic (cat) fines that originate from the

fluidised catalytic cracking refinery processes. The so-called cat fines consist of aluminium and silicon oxides that range in size from sub-micronic to more than 100 microns. Cat fines are now being found more frequently in low sulphur fuel, due to the fact that cutter stock rich in cat fines is being used as the main source to blend residual fuel products to the required sulphur levels.

The main concern is that cat fines may also accumulate over time and gradually cause abrasive wear to engine components such as fuel pumps, injectors, piston rings and cylinder liners.

As smaller sized particles of cat fines are not only hard to remove by centrifuging but also more harmful for the engine components, fuel operators should consider DNVPS’ Catalytic Fines Size Distribution (CSD) screening tool that analyses the size ranges of cat fines present in the fuel. The CSD tool combined with regular fuel system checks of samples before and after the separators will assist in optimising the efficiency of the fuel treatment plant performance and minimise the risk of abrasive wear by cat fines.

In addition to cat fines, various blending activities may result in occasional introduction of non-fuel-related components such as chemical waste streams in the fuel. A recent case in Houston, where numerous affected ships experienced significant operational difficulties, was a good example of this. In those circumstances, extended testing is strongly required. DNVPS succeeded in identifying a number of unusual components such as polymers and phenols using the Gas Chromatography - Mass Spectrometry (GC-MS) technique combined with more analytical techniques. Based on the analysis results, DNVPS issued two bunker alerts warning customers about these contaminations.

Flash point, one of the key indicators of fire hazards from fuels kept onboard a ship, should have a minimum of 60°C under the International Convention for the Safety of Life at Sea (SOLAS) requirements for both distillate and residual grades, except for use on special cases, like emergency generators. According to DNVPS statistics, the number of distillate samples having a flash point

Fuel Quality

Dafni Lionaki joined DNV Petroleum Services (DNVPS) in February 2009 and is working as a project engineer, as well as having customer service manager responsibilities. She has a bachelor’s degree in Chemical Engineering and an MSc in Quality Assurance.

Contact: Dafni Lionaki DNV Petroleum Services Tel: +31 10 2922 651 Fax: +31 10 4797 141 Email: [email protected] Web: www.dnvps.com

‘The number of distillate samples having a flash point below 60°C has

increased significantly over the past years’

Bunkering by the book


(mm2/s) may lead to increased leakages in the engine fuel pumps and subsequently cause engine starting problems. Thus, most engine manufacturers recommend a minimum distillate viscosity of 2 mm2/s to 2.5 mm2/s at 40°C at the engine inlet.

Ordering bunkers can be a very complex function so fuel buyers must exercise greater diligence by considering all available information. Most operators assign their purchasing department to acquire bunkers of minimum acceptable quality at the lowest possible cost. When it comes to buying bunker fuels, the use of more scientific and sophisticated data analysis, which examine the fuel performance of the company and pinpoint areas for improvement, would lead to a more considered decision. In addition to that, the most recent tool of DNVPS, the Fuel Insight Report, benchmarks bunker suppliers over the immediate past three months from more than 1.4 million fuel

below 60°C has increased significantly over the past years, especially in ECA areas, where stricter low sulphur regulations apply. Equally alarming is the fact that there is greater increase in the samples that are marginally on spec for flash point in the same areas. This trend may be a result of the fact that refiners are blending products like ultra low sulphur automotive distillates to meet the regulatory requirements. In such cases, when the flash point value is off specification, the ship’s crew should notify the classification society and keep all heat sources away from fuel storage tanks.

Another important trend that has emerged in distillate fuel quality over the past few years is the slow but continuous decline in density and viscosity. While lower density is positive as it contributes to better ignition properties, the same does not apply for low viscosity. An MGO with very low viscosity of less than 2 square millimetres per second

Fuel Quality

Bunkering by the booksamples of the DNVPS database. Along with the intelligence and expertise of every ship operator, these tools can be a vital input to the decision making process when purchasing bunker fuels.

To conclude, fuel quality trends over the past few years are primarily driven by sulphur regulations. Overall, regulation for marine fuel oil is strict and will only become stricter in the future. The industry will thus face more challenges in terms of the financial aspect and technical issues derived from regulations going forward. However, if ship operators are aware of all the regulations and legislation and the fuel-related challenges these may lead to, they will successfully maintain business and quality. More importantly, risks and challenges can be minimised by adopting the latest version of the marine fuel specification, by participating in a routine fuel testing programme and by having proper procedures and training in place.


The Port of Gothenburg has for many years applied environmental port dues which aim to

encourage the maritime community to steer towards sustainable shipping. The environmentally differentiated port dues are built on the principle that ships with lower nitrous oxide (NOx) emissions and lower sulphur content in their bunker fuel should be rewarded with lower port dues.

In 2010, the Port of Gothenburg invited stakeholders – including clients, governmental representatives and environmental non-governmental organisations (NGOs) – to share their views on how the revenue generated from the differentiated port dues could best be re-invested in measures designed to improve the environment. These measures included ways of promoting even more awareness among members of the maritime community about how they can proactively embrace sustainable shipping.

Benefitting the environmentThe stakeholders also discussed how the money received from the current environmental taxation on high polluting vessels should be invested so that the environment could benefit from it.

The group’s brainstorming activity resulted in a long list of different initiatives and programmes. Some of the suggested initiatives have already been incorporated in the day-to-day work that goes at the Port of Gothenburg, and some were chosen to be the subject of further feasibility studies.

Seven environmental programmes were then selected for implementation, and approximately 20 million Swedish krona ($3 million) will be invested over the coming two years.

Improved fuel qualityThe Port of Gothenburg supports shipping companies and operators that contribute to cleaner air quality in Gothenburg by reducing their emissions of sulphur oxides (SOx) and particulate matter (PM).

A shipping company or operator will be reimbursed for the extra costs that it has incurred by investing in fuel that is cleaner than what is prescribed in law. To qualify, a ship must ensure that the fuel which it burns in its main and auxiliary engines, as well as its boilers, when in the Gothenburg traffic area has a maximum sulphur content of 0.1%.

Liquefied natural gas (LNG) or equivalent clean fuels also qualify for support within the programme.

The initiative includes reimbursement

The Port of Gothenburg recounts how a unique collaboration between

stakeholders has resulted in a smorgasbord of

environmental initiativesfrom the Port of Gothenburg with up to 250,000 Swedish krona ($39,000) per vessel during 2011 for extra fuel costs incurred within the Gothenburg traffic area.

‘Through this environmental measure,’ says Magnus Kårestedt, chief executive of the Port of Gothenburg, ‘we aim to demonstrate that it is possible to take important steps towards cleaner shipping through voluntary collaboration and our hope is that in this way we will facilitate the transition to low-sulphur fuels.’

Clean Shipping IndexThe Clean Shipping Index (CSI) is a tool for cargo owners to evaluate the environmental performance of carriers when procuring shipping services. The CSI has a holistic perspective on the environmental impact of shipping and includes five different environmental parameters: carbon dioxide (CO2), SOx and PM, NOx, water and waste and also chemicals. Around 30 companies, including Volvo, H&M, and Tetra Laval, are already supporting CSI and have declared their intention to incorporate it in their procurement process.

The Port of Gothenburg and the reference group decided to support the initiative by sharing out 600,000 Swedish krona ($95,000) among the first 20 ships calling at the port in 2011 that are classified as good performers according to the CSI. In order to qualify for the reimbursement, the ships need to be verified by a third party.

Great step forward‘It is a great step forward that a port rewards well-performing ships according to the CSI,’ says Ulf Duus, project leader of the CSI. ‘We are very happy that the Port of Gothenburg has taken this initiative.’

Members of the local shipping community are also very supportive.

‘This is just what we have been waiting for,’ says Lars Höglund, CEO and owner of Furetank Rederi, a shipping company from Donsö outside Gothenburg, which has a fleet of seven large tankers. ‘We want to do what is good for the environment, and it

It pays to be green

Port Initiatives

The Port of Gothenburg is the largest port in the Nordic region, handling 11,000 ship visits a year. One-third of Sweden’s foreign trade and two-thirds of its container traffic pass through the Port of Gothenburg.The Port of Gothenburg, which is the only port in Sweden with the capacity to receive the world’s largest container vessels, has terminals for oil tankers, car carriers, roll-on/roll off (ro-ro) vessels, container ships and passenger ferries.

Contact: Åsa WilskeSenior Manager SustainabilityPort of GothenburgEmail: [email protected]: +46 31 732 2220Web: www.portgot.se

‘We want to do what is good for the environment, and it makes it easier if we

get some reward for our investments’


Bominfl ot is an international company operating around the globe, with 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.bominfl ot.net

makes it easier if we get some reward for our investments.’

One of the programmes suggested by the reference group includes making investments in onshore power supply for the container vessels, car carrier and cruise ship segment. The investment is expected to entail between two million and four million Swedish krona ($300,000 to $600,000) for some preparatory work to adjust the quays for onshore power supply

Renewable energyThe environmental benefits of using onshore power supply include reduced emissions of CO2, NOx, SOx and PM on the local, regional and global scale. This leads to less contribution to global warming, acidification and ground level ozone. As the Port of Gothenburg only procures electricity from renewable energy sources, the net effect is high. The immediate environmental benefit

of the investment is lowering the noise nuisance in the port.

One of the more long-term investments is the initiative to retrofit vessels which frequently call at the Port of Gothenburg with LNG propulsion. As many now know, LNG is a fossil fuel but it is more CO2 efficient than oil, with 80% less NOx emissions and almost no SOx or PM emissions. Some are predicting that shipowners must first make the switch from oil to LNG and then to biogas, which has better performance levels when it comes to CO2 emissions reduction. The Port of Gothenburg plans to make LNG fuel available in the port by 2013.

Purification equipmentThe remaining three initiatives include investment in black and grey water purification equipment and the reduction of smell and volatile organic compounds in the port.

Port Initiatives

‘Some are predicting that shipowners must first make the switch from oil to LNG and then to

biogas, which has better performance levels when

it comes to CO2 emissions reduction. The Port of

Gothenburg plans to make LNG fuel available in the

port by 2013’


Simon Brown of W R Systems looks at how the maritime industry is evolving

under the raft of new emissions regulations

These are interesting times in the world of vessels’ emissions: many new regulations are entering into

force over the next few years and this complex maze of seemingly individual requirements is challenging even the most proficient vessel operator.

From a personal viewpoint, being a ‘Brit’ but having recently changed companies to a medium-sized American corporation, this geographical change has provided me with a whole new perspective on this fascinating subject.

The revisions of the International Maritime Organization’s (IMO) MARPOL Annex VI were meant to deliver the maritime industry a unified ‘roadmap’ regarding global requirements for air emissions compliance up until 2020. However, many localised regulations and environmental initiatives have appeared subsequently to create confusion and uncertainty.

Until recently, the use of ‘scrubbers’ was seen as a complex, expensive, and untried high-risk technology. However, volatility in the world oil market, high prices of marine diesel and gasoil combined with the potential scarcity of the required fuels in Emission Control Areas (ECAs) had prompted a significant increase in the scrubber market activity. Various companies are now actively engaging in onboard trials, and the first commercial scrubbers are now in construction at shipyards in the Far East. The United States, although reluctant at first, seems to be embracing this challenge with an open mind.

From a nitrous oxide (NOx) viewpoint, Tier III will bite in 2016. However, engine builders and technology providers are hard at work developing the various technological solutions to meet the significantly reduced NOx limits. Unfortunately, to coin a commonly used phrase, there is no ‘silver bullet’ for NOx. Depending on the vessel’s trading pattern, engine type, and geographic location, the solution or technology required will probably differ widely. With the exception of vessels operating solely on liquefied natural gas (LNG), the industry must strive to reduce emissions on the current engines and boilers and available fuels.

The IMO Bulk Liquids & Gases (BLG) committee has been developing its Guidelines for Selective Catalytic Reduction systems (SCRs) for over two years. This is one technology for reducing NOx, but it is not suitable for every application. The engine builders are actively developing ‘in-engine’ solutions to the applications. Each of these approaches will have a cost, whether in capital outlay, maintenance, or fuel penalties.

Having been relatively late to ratify Annex VI, the US maritime industry has had less time than its European counterparts to become adjusted to its requirements. Until ratification, vessels were using a voluntary scheme to meet the requirements of Annex VI. Now, these vessels are implementing their International Air Pollution Prevention (IAPP) and Engine International Air Pollution Prevention (EIAPP) certificates for the first time. This is creating many challenges for vessel operators.

Changing timesEmissions Monitoring

Simon Brown is Director of International Marine Business for W R Systems Ltd (WRSystems) of Norfolk, Virginia. He has extensive experience in the realm of marine air emissions measurement and is the company’s ‘Subject Matter Expert’. Simon chaired the International Maritime Organization (IMO) Group of Technical Experts which revised the Nitrous Oxide (NOx) Technical Code from 2006–2009. He now works as an adviser on emissions to the UK Maritime and Coastguard Agency (MCA) at the IMO on air pollution related matters.

Contact: Simon BrownW R Systems LtdEmail: [email protected]: www.wrsystems.com


The requirement to operate engines within the settings detailed in the Engine Technical File may not have been followed for the past few years – the use of NOx influencing components with fully traceable IMO part numbers may have been unintentionally overlooked, rendering these engines potentially out of compliance. Vessel managers and superintendents have been frantically tracing documentation trails back over many years to provide the necessary framework and history required to satisfy the US flag. In some cases, the issue of an EIAPP certificate may not even be possible under the traditional route. This could lead to a very lengthy and costly process to ensure the vessel meets the compliance requirements.

Recently, the United States Coast Guard (USCG) has issued guidance to its inspectors regarding Port State Inspection procedures. These differ slightly depending on whether the vessel is US flagged or internationally registered. Strict guidance on the extent of the vessel/engine examination has been issued which follows the IMO Guidelines for Port State Inspections. However, the USCG has specifically detailed which infringements would be cause to ‘detain’ the vessel. It is likely the US Port State Inspections could be more rigorous than with some other MARPOL ratified countries given the USCG’s past history of environmental thoroughness.

The US Environmental Protection Agency (EPA) is responsible for approval of IAPP, EIAPP, and Engine Technical Files. However, there is a big crossover regarding regulations, as the EPA has been enforcing strict ‘national’ rules for marine engines for many years. Unfortunately, the compliance documentation required is not identical. This area becomes particularly complex where vessels require connection to the sea bed or shore-based installation. In these cases, once connected to the seabed, the vessels become regarded as a ‘stationary source’ and required to comply with the applicable US Code of Federal Regulations Title 40 (40CFR) regulations. This presents a huge challenge to operators because when the vessel is ‘off the buoy’, it then must comply under MARPOL. In these cases, working with the EPA is mandatory and usually involves complex

mechanisms calculating total emissions and ensuring specific emissions limits are not exceeded. A detailed ‘quality assurance’ file must be prepared and approved by the EPA and regular audits of data collection/measurement system integrity are mandated.

Given the pressure from the regulators, some innovative owners are choosing to become ‘over-compliant’ by operating their vessels to higher standards than the regulatory limits. This is done for many reasons: charterer’s requirements, corporate social responsibility (CSR) initiatives, making the vessel ‘more attractive’ to their customers, and differentiating themselves environmentally from their competitors. All of these initiatives could involve a significant increase in the vessels’ operating costs. It is my personal experience that no two owners have the same environmental ‘drivers’.

Given the aforementioned,

owners are now looking for a

more holistic solution to their requirements. This is why the

use of emissions monitoring systems (EMS) for engines and boilers has now started to increasingly be identified as a solution to some, or all, of these compliance challenges. I have personally been involved in developing and promoting the use of EMS technology for many years. At the outset, fearmongers claimed that if you actually measured your emissions, you were likely to be ‘out of compliance’ – whereas when using the traditional ‘Parameter Check Method’, ignorance was bliss and compliance would never be questioned.

The plethora of emission control devices which will appear in the next few years and the requirement to switch these on/off depending on whether a vessel is in an ECA mean that monitoring is now actively being promoted by regulators. In order to meet

Emissions Monitoring

some of the various NOx, sulphur oxide (SOx), carbon dioxide (CO2), and particulate matter (PM) regulations, EMS has now become the only acceptable solution. It is anticipated that when Tier III NOx limits are introduced in 2016, vessels will be mandated to provide some form of monitoring at the ‘end of the funnel’ whilst in ECAs to ensure the NOx reduction systems are functioning as designed.

So, where is the EMS market heading? From a purely personal viewpoint, necessity and opportunity dictates commercial development. The original EMS market offerings around the ratification of Annex VI in 2005 were based mostly on land-based technology, proven over decades in power stations and large emissions generating plants. However, the take-up of the technology was fairly small and nearly all for niche application as opposed to mandatory compliance. These

systems tended to be cumbersome and extremely maintenance intensive. The already over-worked ship’s crew had to adjust to more complex equipment, with the associated operation and maintenance requirements. It was obvious that the technology needed significant development to meet the unique requirements of the maritime community.

My company, WRSystems, is based on the US East Coast. Having generated an enviable reputation in the United States regarding product

development and through-life support of marine navigation and communication technology, outside the United States, we are relatively unknown. Three years ago, the company identified a market opportunity in the emissions measurement area, and the design of a simple, robust, sensor-based EMS was seen as a vehicle for generating the same enviable reputation in the global commercial maritime market.

From the outset, it was decided not to become another analyser supplier; this would definitely not meet the company’s core objectives. WRSystems has extensive experience in sensor integration and this background led the development team to identify two essential requirements. The first is the need for the emissions sensor to be maintenance and calibration free. The second is for the system to measure PM, identified as one of the most important emissions components due to its well-publicised health implications.

The Emsys system has been developed and tested over a two-year period. Firstly, the emissions sensing technology was identified,


truly ‘second generation technology’. The comprehensive suite of ABS Type Approvals and MED approval allows the system to meet the requirements of all current and future identified regulations. The system has also undergone approval from the EPA in a critical ‘air permit’ application, proving that the industry is receptive to new ideas and ground-breaking technology.

Commercial ordersWithin the first six months of its launch, Emsys has generated its first commercial orders from four important sectors of the maritime market: exhaust gas cleaning systems, cruise ships, oil and gas exploration, and container ships. These contracts are a testament to an industry under pressure looking for reliable solutions, rather than the traditional lowest price compliance option. The level of commercial activity we are currently experiencing leads me to be cautiously optimistic that we have ‘resonated’ at the correct frequency with maritime community.

Rising to the challengesTo conclude this article with a personal view on where the industry in heading, I think the maritime community has always risen to the challenges ahead, and these new environmental regulations are no exception. The industry has highly visionary leaders and genuinely passionate entrepreneurs ready to take up the challenges set by the regulators and, more importantly, the shipowners. The ‘organic’ nature of environmental compliance during the next few years will inevitably require many changes to perceived thinking. Companies such as WRSystems and its peers will be aiming to deliver the solutions to meet these highly challenging requirements.

with Quantum Cascade Lasers (QCL) being seen as capable of overcoming nearly all of the technology drawbacks of the current crop of Chemiluminescent (CLD) and Non-dispersive Infra-Red (NDIR) analysers. It has the unique ability to measure four gases in one pass, which allows NOx to be measured as NO and NO2 individual components. This overcame one drawback of the traditional technology which required a high-cost, consumable ‘NOx converter’ to convert the NO2 to NO, thus allowing the single gas (NO) analyser to measure NOx. Secondly, we have the calibration issue. Analysers were developed for the laboratory – and although ruggedised versions have since evolved, they are essentially still the same technology. Temperature changes and vibration require these systems to be continually reset through zero and span adjustments.

This ‘drift’ results in inaccurate measurements, but more importantly requires the use of expensive calibration gas to bring the analyser back into the required accuracy. Specialist calibration gas is not always available in every port and is a ‘hazardous air cargo’, which makes it a very expensive consumable item.

WRSystems identified that mitigation of this issue would take the EMS technology forward a generation. The QCL sensor within Emsys is calibration-free, only requiring the mandatory calibration checks necessary within MARPOL or the vessel’s air permit. More importantly, it does not drift with temperature and vibration.

The PM sensor was another critical consideration. Measuring PM usually required an instrument in each exhaust uptake. These instruments tend to be optical and get dirty easily which makes them very high maintenance.

Emissions Monitoring

WRSystems took the approach to measure the PM ‘outside the stack’ in a specialist optical chamber that meets EPA PS-1 standards. This meant that only one PM sensor was necessary for up to 10 exhaust stacks. The exhaust gas is extracted from the relevant stack and maintained in such a manner that keeps the PM in the same condition as at the sample point in the exhaust stack. Onboard tests were undertaken to prove the technology and the system is unique in having ABS Type Approval for measuring PM. WRSystems is currently patenting this technology.

Low maintenance, quick installationOther key precepts of the design were low maintenance, quick installation, high accuracy, and mission critical reliability. WRSystems believes all of these points have been achieved in developing Emsys as

‘Until recently, the use of “scrubbers” was seen as a complex, expensive,

and untried high-risk technology. However,

volatility in the world oil market, high prices of

marine diesel and gasoil combined with the potential

scarcity of the required fuels in ECAs has prompted a significant increase in the

scrubber market activity’


Katia Kardash of the DK Group argues

that demand for fuel savings can drive clean

technology take-up ahead of regulation

Regulation is coming, and soon. We know that if the International Maritime Organization (IMO)

fails to come up with a proposal at its MEPC 62 meeting in July, the European Union (EU) will devise a regional solution, but although there is much speculation over different measures, currently no one knows the details of how or on what level regulation will work.

What is certain though, whether the IMO’s Energy Efficiency Design Index (EEDI), bunker fuels levy or an Emissions Trading Scheme (ETS) is implemented, a clear target to work towards and simple solutions to ensure compliance are vital. Most importantly, all solutions need to unlock the latent profitability currently trapped in the industry – with or without regulation.

Det Norske Veritas’ (DNV) cost curve, featured in the 2009 Pathways to Low Carbon Shipping report, illustrates that there is 15% latent efficiency in the industry for retrofit technology and 25% for newbuild vessels – a lot to play for. Other industry players estimate the inefficiency to be even greater.

Crucial cost savingsThese figures represent crucial cost savings that are there for the taking, something that will resonate with shipowners, operators and their charterers as they strive to combat fluctuating fuel costs. With crude continuing to hold at well over $100 a barrel, bunker prices at double their 2010 levels and drastically higher cleaner fuel costs imminent as stricter Emission Control Area (ECA) sulphur levels are introduced, fuel savings have never been so keenly desired.

To access these fuel savings, in conjunction with reduced carbon dioxide (CO2) emissions, shipowners and operators are increasingly taking a proactive approach to get ahead of regulation. Focusing on improving efficiencies in their operations is good for business and maintaining a competitive advantage. With the clock ticking on the impending timetable for regulatory change, it has never been more important for shipowners to look at the bigger picture and plan ahead.

Unlocking the moneyThis shift in mindset is fundamental to unlock the money and resources that adopting clean technologies, and particularly retrofit technologies, can provide. The message is filtering through the industry, and there is a new progressive energy and outlook as increasing numbers of shipowners are open to technical development and looking to

advancements to access the money that is there for the taking with the application of clean technologies. A recent survey conducted by market intelligence company Fathom has highlighted the increasing popularity of clean technology, and it has published a guide detailing them.

The Guide is the first comprehensive guide to ship efficiency and technology measures. Supported by the Baltic and International Maritime Council (BIMCO) and Lloyd’s Register, the guide details the emission reduction capability, payback periods and ship type applicability for an array of technologies that are increasingly being embraced by the shipping industry – a positive step forward.

Eroding barriersWhilst many of the technologies on the market – including the ones listed in Fathom’s guide – may be well known, there have previously been several barriers preventing many shipowners from choosing these products. These included a lack of proven technologies, unreliability and low fuel prices. However, these barriers are increasingly eroding and the industry is opening its eyes to the possibilities that innovative technologies present, especially those that can also be retrofitted.

The retrofit market is brimming with potential for cost savings that can be accessed now, which is ultimately great for business in both the short and long term. With current bunker fuel prices and impending sulphur and potential greenhouse gas (GHG) regulation, it is the cost savings that can be achieved as a result of reduced fuel consumption that are perhaps the most enticing for tanker owners and operators. To meet these targets, simplicity is vital. An example of such technology is DK Group’s Air Cavity System (ACS).

New breed of technologyAn air lubrication technology that delivers approximately 10% in fuel savings for tankers, ACS represents a new breed of eco-efficient

Fuel Saving Technologies

Coming attractions‘With the clock ticking on the impending timetable for regulatory change, it has never been more

important for shipowners to look at the bigger

picture and plan ahead’

Katia Kardash is the Chief Executive Officer (CEO) of DK Group.DK Group has pioneered the development of the Air Cavity System (ACS) for new and existing vessels to reduce a vessel’s fuel consumption and carbon dioxide (CO2) emissions by up to 10% – providing huge cost savings for shipowners and reducing the shipping industry’s impact on global warming.

Contact: Katia Kardash DK Group Tel.: +31 20 708 4555 Fax: +31 20 203 1055 Email: [email protected] Web: www.dkgroup.eu


Coming attractions

Braemar Falconer LtdBraemar Falconer is part of the Braemar Shipping Services GroupMarine Surveyors and Consultants with offices worldwide

Services include: ● Bunker Surveys

● Fuel Quality Disputes

● Bunker Claims Handling

● Machinery Failure analysis

● Engine Breakdown Investigations

● Expert Witness and Litigation Support

● Fuel Management Procedures

● Bunker and Oil Terminal Technical Audits

● Charterparty disputes

Telephone: Tel: +44 (0) 7766 312319 (24 hours) / +44 (0) 207 7265 1818

Address:3rd Floor

Centurion House37 Jewry StreetLondonEC3N 2ER, UK

Contact: [email protected] or [email protected]

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Braemar Falconer HPA 190X130.ai 1 13/05/2011 09:20

technologies that can now be retrofitted – in this case in just 14 days at routine drydock – for the existing commercial fleet. Making the technology available for both newbuild and current vessels enables shipowners and operators to benefit from emissions reduction and related fuel cost savings straight away, in preparation for new legislation.

There have been many discussions and criticisms of new potential regulations, including the IMO’s EEDI. But, in principle, a form of energy efficiency indexing around vessel design can, if used correctly, stimulate positive change.

Capitalising on opportunitiesTo capitalise on this opportunity, the industry must look to the bigger picture of what proposed indexing regulations such as EEDI represent and how they can benefit all of us in the future. It is also important to consider what EEDI – in whatever final guise it

takes – signals for the existing global fleet, as although it will not actually be covered by this new index, there remains a huge market opportunity for retrofit technologies. With a young global fleet, retrofit technologies can provide efficiencies for the majority of the industry, within a relatively short time.

The savings that ACS can deliver, for example, with a payback time of just 18 months to three years at current bunker prices will make a significant positive difference to the bottom line for all. The payback period can be reduced still further as fuel prices climb and regulations for cleaner distillate fuels come online in 2015 and beyond.

New era for shippingLooking to the future, innovative eco-efficiency technologies that marry cost savings and reduced emissions can provide stability for owners and operators as they enter a new era of shipping.


‘All solutions need to unlock the latent

profitability currently trapped in the industry –

with or without regulation’


Rolf Hasselström maintains that ships

can achieve major fuel savings through

the use of waste heat recovery technology

As bunker prices soar and new Emission Control Areas (ECAs) that require cleaner qualities of

bunker fuel are set to be implemented, the demand for fuel saving technology is increasing. And the calls are not only coming from outside the shipping industry. As potential savings become more apparent, those inside the industry are becoming more and more interested.

One of the most promising methods, Waste Heat Recovery (WHR), allows for the recapturing of some of the energy content which is lost as heat from the burning of fuel. As only a few engines reach efficiency levels of 50%, there is great scope for improvement in utilising the remaining 50% that is currently released as heat.

Different versions of WHR have a long history on land, but there has been a massive upswing in the last 10 years as energy prices have continued to rise, prompting new development. Two-thirds of the energy content in electricity production worldwide is lost as heat. That shows how much is wasted – but also how much there is to gain from energy-efficiency solutions.

On sea, WHR technology has so far been reserved for larger ships and engines. That is something the Swedish energy and environmental technology company, Opcon, is aiming to change with its low temperature WHR solutions.

Earlier this year, Opcon and MAN Diesel & Turbo announced the signing of a

cooperation agreement aiming to exploit the possibilities arising from merging Opcon’s WHR technology, Opcon Powerbox, with MAN Diesel & Turbo’s market-leading diesel engines for cutting fuel consumption and reducing emissions.

Summarising some of the main benefits of Opcon’s technology, MAN Diesel & Turbo commented: ‘Opcon Powerbox is unique in that it caters for low-temperature applications and uses robust technology. Accordingly, it can be integrated with smaller engines in contrast with existing WHR units that are targeted at higher-temperature applications and larger engines.’

Opcon is now developing a marine version of its WHR technology for the production of fuel-free, emission-free electricity from waste heat, saving up to between 5% and 10% of fuel consumption. It is a unique system where one of the features is that it allows for the production of electricity from waste heat

Recovery planFuel Saving Technologies

Rolf Hasselström is the Chief Executive Officer (CEO) of Opcon AB.Opcon is an energy and environmental technology group that develops, produces and markets systems and products for eco-friendly, efficient and resource-effective use of energy. Opcon, which has facilities in Sweden, China, Germany and the UK, focuses on renewable energy and engine efficiency solutions.

Contact: Opcon ABTel: +46 8 466 45 00Fax: +46 8 466 45 01Email: [email protected]: www.opcon.se

‘Two thirds of the energy content in electricity

production worldwide is lost as heat. That shows

how much is wasted – but also how much there is

to gain from energy-efficiency solutions’


temperatures as low as 55°C. By allowing for the recovery of waste

heat in the temperature range of between 55°C and 150°C, the technology opens new opportunities where more waste heat flows and sources can be utilised and recovered. This presents new opportunities for profitable installations on considerably smaller engines than existing WHR solutions have been designed for.

Our WHR technology, Opcon Powerbox, is a stand-alone power plant that transforms waste heat to emission-free electricity. Initially, it was designed for industrial waste heat applications in the process and power industries, but it has been adapted for operation with diesel engines and wet saturated steam as well.

In recovering waste heat, both from exhaust gases, surplus steam and engine-cooling water, Opcon Powerbox facilitates improved energy efficiency and reduced emissions for both newbuilds and retrofits.

The first, groundbreaking reference, a marine installation that utilises waste heat for electricity production, is currently underway.

In this first application, Opcon Powerbox is being integrated with a two-stroke MAN B&W 8S60ME-C8 engine aboard Swedish shipping group Wallenius’ car carrier presently under construction at Daewoo’s shipyard in Okpo, South Korea.

The project is a co-operation between Opcon and Wallenius Marine and has the financial backing and support of the Swedish


‘At sea, WHR technology has so far been reserved

for larger ships and engines. That is something Opcon is aiming to change

with its low temperature WHR solutions’

Energy Agency.Even if the technology was initially

developed for the recovery of industrial waste heat at large process industries, marine applications are not new to us or to the vital components of Opcon Powerbox.

The core component of the Opcon Powerbox, a Lysholm Turbine, is developed out of our subsidiary Svenska Rotor Maskiner’s (SRM) rotating machinery technology. SRM’s rotor machines (of either compressor or turbine type) use a technology that has stood the test of time in marine applications. Stal, Frick, Kobelco, Howden, Atlas Copco and Aerzen are well known brands of screw compressors developed and licensed by SRM with extensive use in various ship types.

Thus, the first steps have been taken in order to bring waste heat recovery to a much wider arena and many more ships. Since we disclosed that the first marine application at Wallenius was under way a year ago, we have seen a growing interest from the shipping industry – even more so than expected in an industry where the introduction of new technology takes time.

I believe that this interest is a testament to the urgent need for saving fuel that is felt throughout the industry. What Opcon does and will continue to do is provide technology for saving fuel, thus cutting costs and emissions of carbon, nitrous oxide (NOx) and sulphur – and thereby turning waste into value.


Fuel Management

Allan Ashby of Braemar Falconer

looks at how effective fuel management can

help to cut costs

For many shipowners and charterers, bunker costs continue to be the largest single element in the

operating costs of the modern merchant vessel and the situation is unlikely to improve, with increasing environmental pressures being placed on the industry as a whole. The need to control bunker costs is now more important than ever, and it is no longer simply a case of buying the cheapest bunker fuel available in the market at any specific time. Many shipowners (and indeed charterers) are not just buying bunker fuel; they are effectively ‘managing’ bunker fuel, from pre-purchase through to sludge disposal.

Purchasing strategiesOwners and charterers who operate large numbers of vessels should consider carefully how they purchase fuel. Many now use hedging strategies to secure the best deal but care must be taken, as any strategy that relies on predicting the future market has risks and wrong decisions can be very costly indeed.

The quality of fuel varies depending on the crude oil from which it is derived, the refining processes used in manufacture, the type of residue, and the cutter stocks used to adjust quality parameters. Two parcels of, say, 380 centistoke (cst) fuel oil from different origins can both meet the International Organization for Standardization’s ISO 8217 Table 2 specifications in full but may be very different fuels.

Energy valueBunker buyers who want to purchase their fuel based on the energy value rather than purely on price can, during the enquiry process, insist on having the full analytical specifications from two or more suppliers before making a decision on which supplier to use. Figure 1 illustrates how comparisons can be made.

Supplier A Supplier B

Price per tonne (in $) 503 500

Density @ 15°C 970.0 990.0

Water (% v/v) 0.3 0.3

Sulphur (% m/m) 3.1 3.8

Ash (% m/m) 0.03 0.03

Net Spec Energy (MJ/kg) 40.35 39.86

MJ/$ 80.2 79.7

Figure 1: Purchasing 380 cst fuel The calculation for Net Specific Energy

can be found in Appendix E of ISO 8217:

2010. Armed with this information, it is a simple matter to determine which is the better fuel in terms of energy, rather than per dollar. In the example given in Figure1, Supplier A can deliver the better value fuel in terms of megajoules (MJ) per dollar, despite the $3 differential. In other words, the vessel will get more kilometres per dollar from that fuel, even though the price per tonne is more than Supplier B.

Results are availableBunker purchasers may have difficulty getting the full analysis results from suppliers before committing to a nomination but the results are available. After all, bunker fuel starts its life in refineries and is then traded as cargoes, before becoming ‘bunkers’. At each custody transfer point full testing is normally carried out and the fuel is traded on those results.

Controlling the supply Shipowners and charterers should watch out for repeated and systematic over-declaration of density on the Bunker Delivery Note (BDN). Small differences between the declared density and the actual density found by independent analysis may seem innocuous. However, over a period of time and over large volumes, these small differences can amount to a significant loss.

Reputable fuel testing agencyEffective control of the supply and usage of bunker fuel onboard a vessel is best achieved by using the services of one of the reputable fuel testing agencies. For a relatively small fee, the shipowner or charterer will receive a huge amount of useful information about the fuel they are buying and how best to consume it on board the vessel, or deal with it if it is marginally ‘off-spec’.

Bunker purchasers should also ensure they are fully up to date on environmental changes in various parts of the world, including proposed changes to legislation. The cost of non-compliance in an Emission Control Area (ECA) can be significant, and can include detention and fines. Ignorance is not a defence.

‘Shipowners and charterers should watch out for repeated

and systematic over-declaration of density on the

Bunker Delivery Note’

Basic rules

Allan Ashby is a Senior Marine Surveyor with Braemar Falconer Ltd.

Contact: Allan Ashby Braemar Falconer Ltd Tel: +44 7766 312 319 Email: [email protected] Web: www.braemarfalconer.com


Basic ruleslabelled samples

● reserve your position and issue letters of protest early, even if you are uncertain of the issues

● call in experts and, if necessary, lawyers early

● devote time to dealing with a claim in the early stages to ensure that vital evidence is not lost.

Having sound bunker policies and practices in place, as well as using a reputable testing agency, helps shipowners and charterers bring successful claims in cases where agreement have been breached, and also helps to make a sound defence against claims if necessary.

To summarise, there is little doubt that good fuel management leads to better efficiency, reduced costs, fewer claims, and gives the bunker purchaser greater awareness and confidence as the bunker market continues to evolve.

Fuel Management

Using bunker fuelAs stated above, fuel quality varies throughout the world and how fuel is handled on a day-to-day basis affects efficiency, wear on components and maintenance programmes.

For example, aluminium and silicon (Al + Si) levels are steadily rising on a global basis. Unless owners and charterers use a fuel testing agency to analyse their fuel they may never know the actual Al + Si content of the fuel they buy, and therefore they may not treat it effectively.

Operating limitsAl + Si levels above the engine’s recommended operating limits can increase wear over a relatively short period of time.

Due to the increasing complexity of modern fuels, the way in which they are handled, treated and then used needs to be carefully monitored and controlled to achieve optimum performance.

Claims cost money!Irrespective of the merits of any bunker claim, they often cost a great deal of money, including hidden costs such as management time spent dealing with a claim. Clearly, claims should be avoided if at all possible, but in some cases making a claim may be the only way to resolve an issue. There are some basic rules to follow to assist in compiling a strong claim (and to construct a defence against a claim):

● be aware of time limitations on making the claim (which may be as short as seven days)

● be aware of the relevant clauses in charter parties’ and suppliers’ terms and conditions (T&C)

● have good handling and storage procedures in place for bunkering

● record all relevant events and keep good documentation

● take and retain properly sealed and

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Ralph E. Lewis considers whether refiners can

step up their processing capacity to meet the

huge increase in demand for low sulphur fuel that will be necessitated by emissions regulations

The late French mathematician Henri Poincaré once remarked: ‘It is far better to foresee without

certainty, than not to foresee at all.’Applying this aphorism to the present

questions associated with modern marine fuels, let us take a forward look into two critical questions seemingly consumed with uncertain resolution.

First we will consider potential supply shortfalls that may arise with looming International Maritime Organization (IMO) mandates for low sulphur marine fuels. Then we will address an alarming trend in bunker quality deterioration – and what remedies are available.

Supply and demandConsiderable attention has recently been drawn to the IMO 2015 mandate for a switch to 0.1% sulphur marine fuels in designated Emission Control Areas (ECAs), and the worldwide change to a 0.5% sulphur fuel in 2020.

The goal, of course, is a reduction in marine vessel emissions, and many consultants and government agencies have conducted comprehensive modelling exercises to justify the mandates. But while it is easy enough to prescribe new standards, the reality of the marketplace can just as easily thwart the best of intentions. Is it a case of too much too fast? Or will refiners ramp up sufficient production capacity to fulfill demand for these fuels?

The answers are dependent on a wide range of factors, but the two major considerations are simply supply and refinery capacity. Both are fraught with challenge.

In 2008, the IMO estimated that annual vessel consumption of fuel oil in ECAs was 27 million metric tonnes (mt). The new ECA area for Canada and the United States, scheduled for implementation in 2015, will require an estimated additional16 million mt, bringing the total for all ECA areas to 43 million mt, barring any increase in marine activity. This level of consumption means that an estimated 771,363 barrels a day (b/d) of 0.1% sulphur fuel will be required when the switch is made, and this is exclusive of any additional ECA zones that may come into play.

To understand potential supply challenges, it is important to understand how low sulphur distillate is produced, what refinery production trends have been and world demand for these fuels in recent years.

Refiners find it easier to produce low sulphur distillate fuels from crude oils that already have low sulphur content. These light, sweet crude oils typically have a sulphur

content of 0.5% or less, and produce a much greater portion of the lighter fractions from which gasoline and distillate fuels are derived. In contrast, higher sulphur sour crudes produce less low sulphur distillate.

Refineries are also designed to process specific crude oil grades. Some units only handle sweet crude, while others are engineered to handle heavier oils. In Southern Europe for example, many refining units are specifically designed to process sweet crudes produced in North Africa. On the Gulf Coast of North America, refiners like Valero specialise in processing the heavy crudes of Texas and Mexico.

With increased demand for mandated low sulphur distillate automotive fuels in North America and Europe, it is expected that sweet crude demand will continue an almost parabolic growth. High quality sweet crude already commands a premium price, benefitting the primary producers in the United States, the North Sea, North Africa, China and Southeast Asia.

Yet the future supply picture of sweet crude remains murky.

On the plus side, the Bakken Basin in North America is a relatively new production area thought to have proved reserves of as much as 4.3 billion barrels – possibly much more. So for North America, supply of sweet crude may not be expected to be a problem moving forward.

By contrast, North Sea Brent crude has been declining since peak production was reached in the UK and Norway in 1999 and 2001 respectively. Some analysts believe that production will fall to one-third of its peak by 2020.

Nigerian production is presently about 2.6 million b/d, up from as little as 1.7 million b/d in 2008 when rebel attacks stymied production. Although a government amnesty programme appears to have reversed the tide for now, instability in the region makes the future uncertain.

The biggest bite out of the sweet crude

Coping with Low Sulphur Fuels

‘To understand potential supply challenges, it is

important to understand how low sulphur distillate is produced, what refinery

production trends have been and world demand for these fuels in recent years’

Rough seas ahead

Ralph E. Lewis is the Vice President – Technical Director of Power Research Inc.

Contact: Power Research Inc. Tel: +1 713 490 1100 Email: [email protected] Web: www.priproducts.com


pie, one that has been driving up prices worldwide, has come from Libya, where bitterness with Gaddafi has slowed production from an average of about 1.5 million b/d to less than 400,000 b/d at the time this article was written. Refiners in southern Europe who rely on Libyan sweet crude for low sulphur distillate production are scrambling for replacement feedstock, and production of low sulphur automotive fuel from these units has waned in recent weeks.

Another short-term factor occurred with the 11 March earthquake in Japan. The catastrophic destruction of the Fukushima Dai-Ichi nuclear power plant, and the damage to many others, knocked out more than 8,600 megawatts (MW) of power generation. This deficit is being made up by conventional oil and coal-fired plants – requiring an additional 250,000 b/d of fuel oil, much of which is low sulphur.

Unexpected natural disasters, regional political turmoil and depletion of known reserves will always play a role in supply, and prices can be expected to change accordingly – affecting consumer demand. Price goes up, demand drops – the basic lesson in Economics 101.

The wild card is government legislation, and in the case of marine fuels it is a big one. Even with an adequate sweet crude supply, can refiners step up processing capacity to meet the huge demand necessitated by the IMO mandate?

The answer hinges on the capability of present and projected refinery configurations to actually produce sufficient 0.1% sulphur distillate.

In Europe, with the new standard for automotive low sulphur diesel already phased in, demand has grown considerably in recent years and regional refiners have not kept pace. Since 2008, the shortfall in European low sulphur diesel fuel has been made up largely by United States refiners – most of them on the US East Coast.

So far, US refiners have been up to the task, due in no small part to the world economic recession which has dampened US demand for low sulphur diesel fuel. Yet an economic uptick could be a real game changer – stressing US refinery production capacity with potential supply shortfalls for Europe.

One critical factor is the US Energy Policy Act of 2005. This legislation resulted in the blending of more than four billion gallons of ethanol annually into US gasoline in 2008, with an expected increase to 7.5 billion gallons by 2012. Although 7.5 billion gallons less gasoline will be produced in 2012, less

diesel, heating oil and jet fuel will be refined as all products are refined simultaneously.

To compensate, some US refiners are adjusting to European demand by relying more on units designed to process sweet crude – a move that is also contributing to tightening supplies.

So given recent supply disruptions of sweet crude, a modest economic recovery in the years ahead could potentially spell trouble. At present configurations, US refiners can increase distillate production between 3% and 5%, and with additional infrastructure investments, as much as 8% more capacity could possibly be added, according to data from the US Energy Information Administration (EIA). Yet it still may not be enough to make up for shortfalls in Europe.

US annual diesel fuel production – most of it low sulphur – presently stands at a little more than 4.1 million b/d. A 5% increase in production would result in an additional 205,000 b/d. When the 0.1% ECA comes into force in North America in 2015, an estimated additional 287,000 b/d will be required just in this ECA alone. While this may go a long way in meeting demand for the North America ECA – it leaves little, if any, for European ECA zones, even if demand stays constant.

If the IMO numbers for ECA demand remain the same for 2015 as estimated for 2008, an additional 484,344 b/d would be required in Europe. This begs the question as to where the new production will come from.

Alarmingly, a number of older, less efficient refining units in Europe are being offered for sale, or are being completely scrapped over the next several years. Last year JBC Energy, a Vienna-based consulting firm, reported that 19% of Europe’s refining capacity is under threat of closure by 2020 – a potential loss of some 3.4 million b/d of production. Another study predicts that by 2015, as much as 1.3 million b/d will be lost.

Although it always makes better sense to build refineries close to market areas, European refiners have been hampered by high investment costs and environmental regulations. While some expansion plans are underway, there is virtually no planning for new refineries in the region.

Others are stepping up to meet some of the demand. Saudi Arabia is planning a multi-billion dollar refinery upgrade over the next several years involving at least five units. One of the Saudi projects, for example, is a new export refinery planned at Yanbu on the


‘While it is easy enough to prescribe new

standards, the reality of the marketplace can just

as easily thwart the best of intentions. Is it a case of

too much too fast? Or will refiners ramp up sufficient

production capacity to fulfill demand for

these fuels?’


Red Sea which is expected to produce more than 400,000 b/d of clean product – the low sulphur distillate portion slated for European customers.

Other sources offer hope. Completed in 2009, the massive second unit of the Jamnagar refinery in India, operated by Reliance Petroleum, has a production capacity of 661,000 b/d – primarily for export of both gasoline and distillate fuels to the European market. Additional sources of distillate are available from Russian refiners, where many refinery upgrade projects are expected to be completed by 2015 at a cost ranging from $13 billion to $24 billion. Even so, these projects involve more modernisation efforts and are not expected to see any major increase in refinery output.

‘What is helping right now is demand destruction brought on by world economic conditions,’ says Colin Crooks, General Manager of Shell Marine Products, Europe/Africa. ‘If markets begin to improve, substantial investment by refiners will be required to meet increased demand if the 2015 standard is to be met.’

Crooks cautions that investment decisions for refiners are predicated on a number of economic factors, and that the time required for engineering, financing, design and construction for a refining unit can result in as much as a 10-year project.

Even more challenging is the 2020 worldwide standard mandating a 0.5% sulphur fuel. Based on IMO data, world marine fuel consumption ranges from a conservative 333 million mt to 500 million mt of heavy fuel oil annually. Such a change would require a step-up in gasoil production from an estimated 6 million b/d to almost 9 million b/d.

To put this in perspective, total world distillate production in 2007, based on US EIA data, was 24 million b/d – a figure that includes diesel fuel, kerosene, heating oil and jet fuel. Hence, a minimum 27% increase in output would be required to meet the 2020 standard – probably a much greater percentage.

Consensus? The jury is still out. Making the 2020 deadline is unlikely, some think. Fortunately, there is some breathing room. A revision to MARPOL Annex VI calls for a review in 2018. ‘Looking ahead, I do not see a possible change to 0.5% sulphur fuel until at least 2025,’ says Robin Meech, Managing Director of Marine and Energy Consulting Ltd (MECL), an independent consultancy based in the UK.

Regarding the ECA mandate, Meech says a combination of factors will likely help vessel owners comply with targeted emissions

reductions. Exhaust gas scrubbers, he says, are expected to be ‘financially viable’ by 2014. Liquefied natural gas (LNG), sometimes touted as the ‘clean’ solution, will play a role, although a very minor one, he believes.

Meech says that better fuel utilisation can and will be achieved – resulting in both emissions reductions and cost control. Among these opportunities are retrofit technologies such as improved propulsion systems design, the use of proven fuel additives, new technologies like improved hull design, better waste heat recovery, and implementation of advance software and slow steaming.

Bunker quality deterioration In an article previously published in this magazine, I cautioned that the 1.5% sulphur fuel then designated for ECA zones was proving problematic for some vessel owners, given that some suppliers were having to use a higher than normal amount of cutter stock to dilute the end product to a proper sulphur percentage (see Bunkerspot, April/May 2007, page 26). We cautioned that given the nature of certain cutter stock qualities, these heavily blended fuels posed potentially serious operational threats.

Independent petroleum testing laboratories are now reporting more incidents of very problematic fuels which are having a dramatically negative impact on vessel operation. Many of the stems are in ECA zones.

Dr Vis, of Houston-based Viswa Labs, reports that in 2010, he encountered 22 cases of purifier and filter choking, 18 cases of piston ring breakage, and 11 cases of fuel pump jamming, among other issues. He also notes that, not unexpectedly, the 1% sulphur ECA fuels have higher cat fines and water content, are typically of lower viscosity than specification and are sometimes prone to poorer ignition quality.

‘We’ve received innumerable complaints – including reports of incidents where the crew has had to endure panic moments with main engines suddenly coming to a halt,’ he says. ‘The perils for the ultimate fuel user – the staff – seem to have increased greatly.’

Dr Vis suggests that vessel owners maintain an ongoing fuel analysis programme, and that onboard engineering staff optimise efficiency of the onboard treatment plant and consider the use of chemical fuel treatment.

The story is similar with DNV Petroleum Services (DNVPS). A survey conducted by DNVPS earlier this year of bunker buyers representing 95 companies also suggests quality issues are on the upswing. Of


‘European refiners have been hampered by high investment costs and

environmental regulations. While some expansion

plans are underway, there is virtually no planning for

new refineries in the region’


those responding to the survey, almost 80% complained of off-spec fuel. Of these, 44% classified the issue as ‘serious’.

The greatest complaint was filter clogging – reported by 64% of respondents. This was followed by excessive sludge issues from 48%, fuel pump sticking and seizures from 40%, and broken ring problems from 19%.

Speaking before the International Bunker Conference in Copenhagen in April, Tore Morten Wetterhaus, Managing Director of DNVPS, warned of more problems ahead. ‘Over the next two or three years, we are expecting more fuel quality cases due to increased blending activities in the supply chain to meet the greater need for low sulphur fuel oil (LSFO) products. Unregulated blend components will remain a key cause to such problems.’

As a supplier of chemical fuel treatments to more than 150 shipowners worldwide, Power Research Inc. (PRI) has experienced

a heightened demand for fuel treatment chemicals specifically formulated to address these issues.

‘Our focus has always been to keep ahead of these problems – and make absolutely certain that we formulate with the optimum solutions in mind,’ says Blake Davidson, PRI Chief Financial Officer. ‘Foremost in our thinking is the safety of onboard personnel. Unexpected engine failures at sea associated with poor quality bunkers are wholly avoidable in most cases. Our job is to work closely with shipboard and onshore personnel to do everything we can to ensure operational reliability.’

PRI manufactures three fuel treatments for heavy fuel, PRI-RS, PRI-27 and PRI-SOLV. The first two incorporate PRI’s exclusive thermal stability technology – a chemistry verified by MAN Diesel under the strict MARPOL Annex VI emissions testing protocol to reduce particulate, unburned


hydrocarbon and carbon monoxide emissions. All three chemistries are formulated with effective dispersant technologies that have shown to not only increase reserve stability, but to also reduce shipboard sludge generation in a range of 30%-50%, depending on initial fuel quality.

‘You could say we have taken a holistic approach,’ says Davidson. ‘We look at every possible thing that can go wrong with fuel, and formulate accordingly.’

A pioneer in lubricity technology born with the company’s founding in California in 1985, PRI also manufacturers PRI-D lubricity/stability treatment for low sulphur gasoil. Favoured by major vessel operators worldwide for application to 0.1% gasoil, PRI-D has for many years been applied to fuel storage tanks at a wide range of onshore power generation plants, including emergency standby generators at nuclear power operations.


‘My inner technician has on many occasions kept me from getting caught up in the crazy maelstrom that trading can be,

and forced me to take a measured, logical approach to dealing – albeit it at top speed’

Colin Holloway believes that moving

from the technical side of the bunker business

to become a bunker trader has broadened

his perspective of the industry

Over the past 15 months I have undergone something of a Dr Jekyll and Mr Hyde

transformation. Fortunately, however, it wasn’t a metamorphosis from mild-mannered doctor to slavering beast. Rather, it was a shift from someone steeped in the details of the technical side of the bunkers business to a trader battling in the commercial arena. And rather than highlighting my dark and light sides, it has shown me the benefits of insight and a diverse skills-set to provide the best advice and get the best deals for GAC Bunker Fuels clients throughout the Middle East.

I started my career in the oil industry as a petroleum chemist at the then Mobil Coryton refinery on the banks of the Thames in London. That meant that, like Dr Jekyll, many of my days involved a lab coat, test tubes and an eye for detail. That nit-pickiness served me well in the years that followed, when I moved into the cargo inspection field, ending up as Regional Manager for DNV Petroleum Services (DNVPS) based in Fujairah.

All that changed, however, when I spotted a GAC ad in the trade press. The Group’s bunker trading arm was looking for a Bunker Fuels Manager for the Middle East and India.

I was interested. It sounded appealing – and it could be my chance to escape the endless arguments over minute details that would make one fuel more suitable for use than another. The cut and thrust of wheeling and dealing on the bunker market sounded much easier and (if I’m honest) rather glamorous. Or so I thought.,,

Change of paceFrom Day One, it quickly became clear to me that my new role and lifestyle would need a very different approach and set of skills. The steady, pragmatic (dare I say plodding?) methodology of the testing agency life now had to step aside for a more commercially focused view of the market, with an eye kept firmly on targets to be met, new priorities and cut-throat deadlines.

My first lesson was that the life of the

trader is much faster-paced and hectic than that of a tester. I quickly learned that to win a deal, I had to move fast and not hesitate. And yet, I was determined not to let more than a decade of experience in the inspection sector go to waste. Surely, my insight from the other side of the business could help make me a better trader? And indeed, since then, my inner technician has on many occasions kept me from getting caught up in the crazy maelstrom that trading can be, and forced me to take a measured, logical approach to dealing – albeit it at top speed.

My scientific alter ego also serves me well when I am called upon to deal with the technical side of the many disputes and claims that fall into every trader’s life. Now I am forced to look at the big picture rather than focusing purely on just one aspect, it has become very clear that a trader sitting in the middle of a deal has to understand all sides of every argument. And having to secure payment for your supplier within his 30 days terms, no matter what, while your buyer is withholding part or full funds until a dispute is fully settled can certainly focus the mind and force you to get creative.

Testing agencies are neutral in deals and disputes, so my time on that side of the business gave me experience of sitting between two parties. It’s a little like sitting in on a poker game and being able to see at least some of the cards (but not being able to talk about them). Now, as a trader, I have to add to that neutral stance consideration of a wide range of commercial factors, like the value of long-term relationships, before taking a firm stand.

Interesting timesI certainly chose ‘interesting times’ in which to cross over from one side of the business to another. The past two years have been

Alter egoBunker People

Colin Holloway is GAC Bunker Fuels Regional Manager for the Middle East.

Contact:Colin HollowayGAC Bunker FuelsTel: +971 480 59389Email: [email protected]: www.gac.com

‘The cut and thrust of wheeling and dealing on the bunker

market sounded much easier and (if I’m honest) rather

glamorous. Or so I thought…’


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challenging all round – and not least for the shipping industry and the bunker market. Margins are being squeezed like never before and competition is fierce, with deals being fought down to the very last cent. But my background in inspection forces me to keep in mind that the cheapest deal is not necessarily the best one – and certainly not if quality is compromised.

These interesting times have also highlighted the importance of credit, something I rarely had to worry about when testing a fuel sample in the lab. As a trader, however, I can never let it slip off my radar. After all, extending credit to a client whose credit-worthiness has not been thoroughly checked could literally cost hundreds of thousands of dollars.

Many is the time that I have found myself caught between a trader champing at the bit to close a deal and our credit manager saying no. But that’s when the GAC Bunker Fuels

team really kicks in with frank discussions to bash out the solution that will make the difference between a bad and a good decision.

Looking back, the time since I joined GAC Bunker Fuels in February 2010 seems to have flown by and I have learned so much.

Bunker People

‘Margins are being squeezed like never before and

competition is fierce, with deals being fought down to the very last cent. But my background in inspection forces me to keep in mind

that the cheapest deal is not necessarily the best one’

Plans are now in the pipeline to expand our Dubai base, starting with our recent move to the Jebel Ali Free Zone to be physically closer to the rest of the GAC Group. That is important because the GAC global network is the key to our success – by combining our bunker market intelligence, contacts and expertise with the resources of our colleagues on the ground around the world, GAC Bunker Fuels can give its clients that little extra.

It’s been a steep learning curve, but I now feel like the buzz and hustle of the bunker trading world was always in my DNA even when I was analysing samples in the lab. I just didn’t know it was there.

And unlike poor old Dr Jekyll, I rather like my alter ego. Together, the inspection perfectionist and the fast moving deal-closer make a GAC Bunker Fuels man with a foot in both camps and an understanding of more than just profit margins.


The beautiful city of Cartagena in Colombia was the venue for the launch of another book

from Petrospot, Commercial Practice in Bunkering, written by the well-known industry expert Nigel Draffin. The opportunities for enthusiastic debate and, of course, for all-important business networking provided by the Maritime Week America’s conference in May created the perfect environment for the introduction of this well-researched, highly detailed and engagingly written publication to the global bunker industry.

Commercial Practice in Bunkering adds to the important knowledge bank of information on bunkering established by Nigel’s earlier books: An Introduction to Bunkering (2008), and the Spanish language version Guía de Abastecimiento del Combustible Marino, An Introduction to Fuel Analysis (2009), and An Introduction to Bunker Operations (2010).

In his new book, Nigel gives key guidance and information on the process and methods of buying and selling bunker fuels. It assumes a little knowledge of vessels and bunker fuels and is intended to be a ready reference for those who need to understand how the commercial side of the business really works.

Any commercial deal between a seller and buyer can be frustrated at any stage of the process, and bunkering can be particularly prone to contractual problems. With this in mind, the book examines every aspect of the commercial deal, from the buyer’s enquiry

Two new books published by Petrospot provide further valuable

insights into the multi-faceted and complex marine fuels industry

to the suppliers’ offers, terms and conditions, the contract and each party’s obligations.

The reader is deftly guided through the enquiry, pre- and post-fixing, ownership profiles and responsibilities, sellers’ terms and conditions, finance and the use of bunkering software and the Internet. Along the way, it also covers issues such as defaults, claims and debunkering.

Importantly, and for the first time in print, the book also dissects the latest edition of bunker quality standard ISO 8217:2010 and draws useful comparisons with its predecessor, ISO 8217:2005.

Commercial Practice in Bunkering includes multiple examples of clauses drawn from real contracts and practical advice on how to interpret them. There is also a chapter devoted to the costs – and potential financial penalties – of increasingly stringent international environmental regulations.

As can be expected from a book written by Nigel Draffin, this publication also includes an impressive amount of informed detail on those areas of bunkering that are often ignored, and there is an extensive glossary, comprehensive indices and appendices, as well as a very useful ‘where to go’ section.

No sooner had the world of bunkers had time to digest this latest tome than another book was ready to emerge from the Petrospot stable.

As Nigel Draffin succinctly explains about the commercial deal: ‘It can be frustrated at any stage of the process, by either party or – on occasion - by third parties.’ And so, in Legal Issues in Bunkering – An Introduction to the Law Relating to the Sale and Use of Marine Fuels by Trevor Harrison, there is a wealth of information to be found on the

Knowledge bankEducation and Training

Petrospot publishes Bunkerspot and Cargo Security International magazines and online services, as well as a growing library of books on marine fuels and marine surveying. It also organised a range of training courses, educational seminars and international conferences, including Maritime Week Americas and Oil & Shipping Africa.

For more information on Petrospot’s bunker books, see www.petrospot.com/books.


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Education and Training

legal intricacies of bunkering as well as an extremely useful section on what to do when the bunker deal becomes litigious.

The author is well versed in the complexities of the law as it relates to bunkers. Trevor qualified as a maritime lawyer over 30 years ago, and now practises as a maritime arbitrator, mediator and legal consultant with a particular expertise in bunkering.

His new book offers a fascinating and very accessible investigation into the legal aspects of bunkering. He covers the basics of the Law of Contract, looks at the particular features of bunker contracts, and has produced a focused and systematic explanation of what sellers include in their Terms and Conditions.

The second section of the book deals with what happens when things go wrong, including unpaid bills, ship arrest, and quantity, quality and charterparty disputes. The final part of the book covers regulations and conventions, such as the MARPOL

Convention and Annex VI, and also discusses liability in relation to oil pollution. Extensive appendices cover issues such as the very important Sale of Goods Act 1979, the Unfair Contract Terms Act, arrest in England and in the United States, bribery and corruption, and the BIMCO Standard Bunker Contract.

No single volume can contain the vast quantities of information locked inside the many dusty legal volumes on library shelves, but Jonathan Lux, who penned the book’s foreword, sums up the aims and achievements of this publication admirably: ‘It covers legal issues that one might expect to find in a volume 10 times larger, distilling the salient points and thankfully summarising the more arcane bits.’

Finally, for those avid readers of bunker books who still thirst to know more about the industry, be reassured, there are more in the publishing pipeline. So watch this space!

‘No sooner had the world of bunkers had time to digest this latest tome than another book was

ready to emerge from the Petrospot stable’


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marinos.pdf 1 5/10/11 10:17 AM

Llewellyn Bankes-Hughes looks back at one of the most successful

bunkering events ever held in the Americas

Entitled Bunkering in the Americas – A Fresh Perspective, there can be no doubt that this year’s Maritime

Week Americas, held in late May in the colonial city of Cartagena de Indias in Colombia, exceeded all expectations. Taking place outside the United States for the first time, the conference programme certainly provided a new view of the Americas, while the numerous networking activities provided a colourful and lively backdrop for those there to conduct new business.

Despite initial concerns that Colombia might prove too risky a location for such an event, these were quickly dispelled as over 180 delegates poured into the Hilton Cartagena to make it the largest bunkering gathering ever held in Latin America. Ultimately, Maritime Week Americas belonged to Latin America and every corner of this region was fully represented.

The week began with a one-day basic and two-day advanced training course run on behalf of the International Bunker Industry Association (IBIA). The main conference was opened by Julio Cesar Vera, Director of Hydrocarbons at Colombia’s Ministry of Mines and Energy, and Juan Pablo Ospina of national oil company, Ecopetrol. Both examined the vast potential offered by Colombia’s oil and coal industries both to Colombians and to outside investors and commercial partners.

The leading Panamanian lawyer, Francisco Carreira-Pitti, looked at global political risk and focused on the imminent arrival of the new superpower, China, which is now investing massively in Latin America. Chris Thorpe of New York-based HCEnergy focused on the oil markets while Al Canal,

Calculated riskEvents

CFO of Bunkers International, skilfully dissected global shipping markets.

The session on the Colombian bunker industry, led by Eugenia Benavides of Terpel Marine, included four highly detailed overviews of the fast-growing ports of Barranquilla, Santa Marta, Cartagena on the Atlantic coast and Buenaventura on the Pacific coast, with added comments from the floor about the new port, Puerto Bahia, near Cartagena.

Regional fuel quality issues and developments in bunker metering were covered respectively by Hauk Wahl of DNV Petroleum Services (DNVPS) and David Ashley Hayes of Emerson Process Management, before attention turned to some of the key bunkering markets in the Americas. Martijn Kelderman of Marinoil tackled Mexico, Ellery Jones of Ventrin Petroleum covered the Caribbean, Jose Digeronimo of VT Shipping International explored Panama, and Fernando Rouliez of COPEC looked at Chile. Amparo Brocel of Oceanbat and Alvaro Marques of Bominflot do Brasil respectively looked at Ecuador and Brazil.

The conference was completed with an unusually full and active final session featuring Ian Adams, Chief Executive of IBIA, discussing environmental issues and Nigel Draffin, Technical Director of LQM Petroleum Services and Vice Chairman of IBIA, looking at the challenges and opportunities for market players. Bob Lintott, Managing Director of ISObunkers and Chairman of IBIA, then outlined what the Association does for the industry, introducing the recently elected Eugenia Benavides to outline what it can do for Latin America.

With some 24 sponsors, Maritime Week Americas 2011 was strongly supported. Bunkers International (gala dinner with 13-piece Latin band and much dancing), Ecopetrol (opening reception, complete with synchronised swimming display and numerous iguanas), C. I. International Fuels (‘white party’ on board a Spanish galleon), Petrobras (gala reception) and Terpel Marine (day-long boat trip to the white sands of the Rosario Islands) were the main supporters, along with Petroleos de Venezuela, Codis, Vopak, Oiltanking, Oceanbat, Districandelaria, Multiservice, Petrocosta, Endress & Hauser, Emerson Process Management, Marinoil, Quality Bunker Supply, Gulf Marine, Infineum, Ventrin Petroleum, Van Oil, Praxis and Searights.For its fifth year, this annual week-long festival of bunker courses, an exhibition, marine fuels conference and hugely popular social events will move to Panama, in May 2012. For more information see www.maritimeweekamericas.com


‘A representative of one of the world’s largest shipping companies commented that although there was indeed light at

the end of the tunnel, that light is very dim at the moment’

noted that redundant resources of natural gas are available, which can even be obtained from renewable resources such as bio-methane from waste. He said that technical solutions to install gas-fuelled engines in various types of vessels are in place, ‘demonstrating the feasibility of this alternative to liquid fuels’. However, he also noted that the logistics of LNG bunkering stations and infrastructure ‘need to be developed’.

From a technical viewpoint, Johnny Kackur of Finnish engine builder Wartsila sees LNG as the way forward, claiming that the technology of dual-fuel mechanical propulsion systems is now proven, they are environmentally friendly and offer the lowest operating costs.

According to Ian Fisher of law firm K&L Gates, there are many challenges facing the worldwide use of LNG as a bunker fuel, including legal issues, but most of these are regulatory concerns and none ‘appears to be insurmountable’. The greatest challenge, he argued, appears to be the investment that is necessary to build the terminals and vessels to supply the LNG.

From a commercial perspective, Jonty Rushforth of Platts said that LNG historically has been priced on a linkage to oil but now spot market pricing is beginning to grow.

A representative of one of the world’s largest shipping companies commented that although there was indeed light at the end of the tunnel, ‘that light is very dim at the moment’.

Also speaking at the seminar were Pavel Smortritskiy, Shipping Technical Superintendent at Gazprom Marketing and Trading and Divay Goel of Drewry Maritime Services.

There is still a very long way to go before liquefied natural gas (LNG) will become a viable alternative

bunker fuel for ships in Asia, although there is some light at the end of the tunnel. This was the consensus opinion that emerged from a seminar which Petrospot held recently in Singapore.

Entitled LNG – The Future Fuel for Shipping?, the seminar examined the technical, operational, legal and commercial challenges associated with using LNG as a bunker fuel but concluded there is not only an information gap at present but that there is also a stand-off whereby no-one will invest in the necessary infrastructure until it is proven that there are sufficient numbers of ships able to use LNG as a bunker fuel, and no-one will invest in LNG-fuelled ships until they are convinced the infrastructure is in place.

This view was highlighted by keynote speaker Torben Skaanild, Secretary General of the Baltic and International Maritime Council (BIMCO), who said that the progress of LNG as a bunker fuel is hampered by the lack of infrastructure in place (see page 22). He said that ‘technically, it is feasible to bunker from LNG storage tanks ashore or directly from an LNG feeder or bunker barge’, but that ‘the lack of infrastructure for such bunkers does temper the enthusiasm for LNG’. He said that while LNG as a fuel may be attractive, ‘the investments are significant’.

Dimitri Maroulis, Senior Consultant at the DNV Clean Technology Centre, said that only 22 non-LNG transport vessels currently use LNG for fuel. Four of these are offshore supply vessels, two are patrol vessels, one is a tug and the others are car and/or passenger ferries. A further 18 ships are under construction at the moment and at least two are scheduled for conversion this year.

However, almost all of these ships operate in Norway where, according to Yannis Calogeras of Bureau Veritas, there is not only an ample supply of LNG but also generous government development funding available.

Calogeras acknowledged that LNG appears to be ‘a quite interesting fuel’, in particular for short sea shipping, due to its reduced emissions and its ability to meet the most stringent environmental regulations. He

Delegates at a recent Petrospot seminar in

Singapore considered whether LNG could be the

marine fuel of the future

Tunnel visionEvents

Petrospot Ltd, the publisher of Bunkerspot, hosted the seminar LNG – The Future Fuel for Shipping? in Singapore on 13 April, as part of the Maritime and Port Authority of Singapore’s (MPA) Singapore Maritime Week.Petrospot will be holding a follow-up conference on the use of liquefied natural gas as a marine fuel in Singapore on 10-12 January 2012.

Contact:The Events TeamPetrospot LtdTel: +44 1295 81 44 55Fax: +44 1295 81 44 66Email: [email protected]: www.petrospot.com

‘Many challenges are facing the worldwide use of LNG as a bunker fuel, including legal issues, but most of these are

regulatory concerns and none appears to

be insurmountable’


OCTOBER

UNITED ARAB EMIRATES: Middle East Workboats

3-5 October, Abu Dhabi

Contact: Emma Hamilton, Seatrade Tel: +44 1206 545121 Email: [email protected] Web: www.middleeastworkboats.com

UNITED STATES: The Oxford Bunker Course (Advanced)

10-12 October, Houston, Texas

The Oxford Bunker Course (Advanced) is a highly intensive three-day training course, led by Nigel Draffin and taught by a highly professional team of lecturers. It integrates every aspect of bunkering and is designed for students with at least two years’ experience in bunkering.

Contact: Osei Mitchell, Petrospot Tel: +44 1295 814455 Fax: +44 1295 814466 Email: [email protected] Web: www.petrospot.com/houston

NOVEMBER

SOUTH AFRICA: Oil & Shipping Africa 2011

November, Cape Town

After two highly successful forays into West Africa, Petrospot returns to Africa for the third annual Oil & Shipping Africa. The conference and training course programmes now attract many African delegates, in addition to a growing number of foreign companies eager to learn about bunkering opportunities in this part of the world. This year’s event will feature the Oxford Bunker Course (Advanced).

Contact: Osei Mitchell Tel: +44 1295 814455 Fax: +44 1295 814466 Email: [email protected] Web: www.petrospot.com/africa

To list details of industry events, email: [email protected]

Events

Events Diary JUNE

SINGAPORE: Asia Green Shipping Summit

15-17 June, Singapore

Preparing the Asian fleet for a new world of environmental limits.

Contact: IBC Asia Tel: +65 6508 2401 Fax: +65 6508 2407 Email: [email protected] Web: www.greenshippingasia.com

SEPTEMBER

UNITED KINGDOM: The Oxford Bunker Course

12-16 September, Oxford

The Oxford Bunker Course is a highly intensive five-day residential training course covering technical, operational, commercial, financial and legal aspects of bunkering. Designed for newcomers to the business and for those who may already have some experience, it is often oversubscribed, so early booking is essential. It is widely acknowledged as the best bunker course in the world and is renowned for its social activities.

Contact: Louise McKee, Petrospot Tel: +44 1295 814455 Fax: +44 1295 814466 Email: [email protected] Web: www.petrospot.com/oxford

SWEDEN: WISTA 31st International Conference 2011

14-16 September, Stockholm

The Women’s International Shipping & Trading Association’s (WISTA) annual event is entitled Leadership – Opportunities for the Future.

Contact: Berit Bomqvist, Conference Convenor Tel: +46 705 29 8659 Email: [email protected] Web: www.wistaconference.org

SWEDEN: LNG Fuel for Shipping: A Commercial Reality?

20-21 September, Stockholm

The forum will question the business case for using liquefied natural gas (LNG) as a marine fuel and consider what this means for maritime businesses and the bunkering industry.

Contact: Informa Events Email: [email protected] Web: www.informamaritimeevents.com

NETHERLANDS: ARACON 2011

21-23 September, Rotterdam

ARACON 2011, jointly organised by Petrospot and Vergo Consultancy, is the one bunkering event serving the Amsterdam-Rotterdam-Antwerp region that serious maritime professionals should not miss! Comprising a highly-focused two-day conference, dinner at the Royal Maas Yacht Club and an onboard dinner tour of the Port of Rotterdam.

Contact: Elena Melis, Petrospot Tel: +44 1295 814455 Fax: +44 1295 814466 Email: [email protected] Web: www.aracon2011.com

UNITED ARAB EMIRATES: TOC Middle East 2011

25-27 September, Dubai

TOC Middle East is partnering with DP World for this year’s event.

Contact: Paul Holloway, TOC Events Tel: +44 20 7017 4394 Email: [email protected] Web: www.tocevents.com

NETHERLANDS: BunkerExperience 2011

26-29 September, Rotterdam-Vlaardingen

A three-day course offering a unique combination of classroom learning and real-life experience.

Contact: Goris Vermeulen Tel: +32 484 168 780 Email: [email protected] Web: www.bunkerexperience.com


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Networking

On the move... EuropeOW Bunker has appointed Andrew Ananiev as Sales Manager, heading up the OW Bunker Russian Desk. He will be based in OW Bunker’s headquarters in Aalborg, Denmark. Direct: +45 9931 8353; Mob: +45 2938 8347.

Martin Kristoffersen has joined OW Bunker’s Aalborg office. Direct: +45 9931 8310; Mob: +45 2912 6476; Email: [email protected].

Sissi Quach has been appointed Senior Bunker Trader and will be based at OW Bunker’s Copenhagen office. Direct: +45 3945 1253; Mob: +45 2912 5979; Email: [email protected].

Kristian Andersen has joined A/S Dan-Bunkering Ltd as a bunker trader in its Copenhagen office. Tel: +45 3345 5410; Direct: +45 3345 5448; Mob: +45 3133 1090; Email: [email protected]. Bunker trader Michael M Hedager has moved back to the Copenhagen office from the company’s operation in Singapore. Direct: +45 3345 5417; Mob: +45 3133 1090; Email: [email protected].

KPI Bridge Oil has appointed Leonardo Galione as a bunker trader in its London office. Tel: +44

20 7799 4420; Mob: +44 780 879 4483; Fax: +44 20 7799 4421; Email: [email protected].

Jan-Piet Oosterlee, previously with Petroval Bunker International B.V., has been appointed Commercial Manager at Dutch barge operator VT Group (Verenigde Tankrederij BV), located at Nijmegenstraat 1, 3087 CD Rotterdam. Tel: +31 10 487 6220; Mob: +31 65 356 2530; Email: [email protected].

Asia PacificJessie Ng has joined Global Vision Bunkers (Far East) Pte Ltd in Singapore as a bunker trader. Tel: +65 6533 0890; Mob: +65 9451 8458; Email: [email protected].

Dylan Ching Zheng Wen has joined A/S Dan-Bunkering’s Singapore office as a bunker trader. Tel: +65 6572 4300; Direct: +65 6572 4305; Fax: +65 6572 4301; Email: [email protected].

Mark Catton, a non-executive, non-independent director, has succeeded Mike Bandy as Chemoil chairman. Other board changes announced at Chemoil’s Annual General Meeting in April included the resignation of Philip Calvin Anderson, the Chairman of the Nominating and Remuneration Committee (NRC). The board also accepted the recommendation to appoint Lim Ah Doo

as an additional independent director of the company. Lim will replace Peter Meade as a member of the Audit Committee, while Meade, the company’s lead independent director, will take Anderson’s position on the NRC.

Larry Fu Kim Po has joined Bomin Bunker Oil Ltd in Hong Kong as a bunker trader, replacing Jack Chan. Tel: +852 2891 7799; Mob: +852 9680 0952; Email: [email protected].

Steven Chen has joined the GAC bunker fuels team as a bunker trader based in Singapore. Tel: +65 6477 1028; Mob: +65 8200 3575; Email: [email protected]. General email: [email protected].

Karen Choy, formerly of Bominflot, has joined Integra Fuels Asia Pte Ltd as credit manager. Tel: +65 6622 0028; Fax: +65 6622 0099; Email: [email protected].

KPI Bridge Oil has appointed Carmen Poh as a bunker trader in its Singapore office. Tel: +65 6220 8655; Mob: +65 9725 6974; Fax: +65 6220 8155; Email: [email protected].

AmericasGlobal Vision Bunkers (LATAM), headed by bunker trader Renzo Baeza, has relocated its Chilean office to Prat 865, Office 33, Valparaiso. Tel: +56 32 259 3697; Mob: +56 98 427 2566; Email: [email protected].

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