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Schifffahrt | Shipping
Schifffahrt | Shipping Higher prices, greater assurance in Singapore Mass flow meters are mandatory for bunkering MGO in Singapore since January. The technology deters undercutting among bunker suppliers while ensuring accurate delivered quantities, reports Zeng Xiaolin Marine fuel prices in Singapore have doubled year-on-year to more than 340 $ per tonne, following the mandatory installation of mass flow meters (MFM) on all bunker tankers in the city-state. Singapore is the world’s largest bunkering port by sales volumes, with a record 48.6 mill. t of marine fuels sold in 2016, up from 45.16 mill. t in 2015. Due to the highly competitive bunker market, suppliers often undercut each other to get business. In order to recover the profit margins the errant suppliers resorted to short-changing end-users with regard to the delivered fuel quantity. The short-changing of the supply was often disguised through foaming, which was known as the »cappuccino effect« in the industry. Often, disputes arose when poor fuel economy aroused the ship operators’ suspicions. To safeguard the image of Singapore’s bunker industry, the Maritime and Port Authority of Singapore (MPA) announced in April 2014 that MFM would become mandatory from 1 January 2017. Also known as Coriolis flow meters, MFMs measure fluids based on mass, and not volume. Thus the use of MFM will allow the fuel to be measured by mass directly, enhancing transparency during bunker deliveries. Seven months after the MPA’s announcement, Danish bunker trading group OW Bunker went bankrupt after a 125 mill. $ fraud was uncovered in its dealings with Tankoil, a Singapore-based physical supplier, in addition to a 150 mill. $ risk-management loss. OW Bunker’s demise stunned the market and a number of physical suppliers and ship operators remain entangled in lawsuits over unpaid monies. However, the incident did not interfere with the MFM implementation. Oil major ExxonMobil is one bunker seller that is a proponent of MFM, having been the first physical supplier involved in working out a protocol for bunker delivery using MFM-enabled tankers. During the process, ExxonMobil worked with the MPA and MFM manufacturers to develop delivery methods. As part of a pilot programme, the oil major also began using an MFM-enabled tanker, »Emissary«, which is time-chartered from Hong Lam Marine. ExxonMobil Marine Fuels and Lubricants’ global marketing manager Iain White told HANSA: »When we piloted MFM-enabled tankers, a two-tier market emerged between suppliers using such metering systems and those that did not. This Ship being bunkered by »Emissary« Photo: MPA Singapore 26 HANSA International Maritime Journal – 154. Jahrgang – 2017 – Nr. 4
Schifffahrt | Shipping divide disappeared once the use of MFMs became mandatory.« The delivery of fuel oil from MFM-installed tankers is more or less 99.5% accurate. White continued: »We have had very low rates of quantity disputes as MFMs actually increase transparency in the bunkering process, allowing the customer to get exactly what they paid for. The reality is that once the bunkers are pumped into the ship, it’s impossible to accurately measure the quantity. So when there were disputes, we have been able to demonstrate that the bunkers were all pumped according to protocol.« Other sources told HANSA that disputes have gone down noticeably after the MFM rule was implemented. A Singapore-based fuel trader said: »Bunker prices are higher after the MFM rule kicked in. However, we haven’t encountered any disputes so far this year. That means things are improving after the MFM implementation.« Concerns that the MFM implementation would cause bunker prices to increase in Singapore and make the city-state’s marine fuels market less competitive than neighbouring ports, appear unfounded. In January 2017, bunker sales in Singapore totalled 4.46 mill. t, a historic high for such transactions in the city-state. Bomin Group’s global head of bunker operations, Jan Christensen, told HANSA that the company, which operates four Jan Christensen, Bomin Group’s global head of bunker operations Photo: Zeng Xiaolin MFM-installed tankers in Singapore, has had a positive experience so far. Christensen: »Many of our customers realise the added value of using MFMs to ensure quantity and speed up supply, and indeed many used this method for delivery ahead of the mandatory requirement in Singapore. In the months preceding the mandatory implantation of MFMs in Singapore, there was speculation that demand was likely to shift to neighbouring ports. These (sales) statistics strongly resonate with our experiences on the ground. Customers value the importance of a first-rate service that maximises operational and cost effciencies.« Short-changing of delivered fuel quantities was highlighted when Danish bunker supplier Monjasa was fined 1.43 mill. $ in December 2016 for overcharging a Malaysian customer. International Bunker Industry Association’s regional manager (Asia) Simon Neo told HANSA that the Singapore market is still competitive, despite the increase in marine fuel prices. Neo said: »Bunker prices today are a reflection of what the real prices should be. This is unlike the days when suppliers quoted below the cost price to get business.« White concurred with this point. He said: »There isn’t really an increase in bunker prices since the introduction of MFMs. If you take into account how different the industry is compared with before, the added transparency of delivered bunker quantities and improved effciency for suppliers, makes it a win-win situation for all.« Hong Kong-listed Brightoil Petroleum, which is a physical supplier in Singapore and China, has purchased six bunker barges to meet the bunkering demand in Singapore, of which five were MFM-certified. The remaining 4,100 tdw barge is used as a marine diesel fuel bunker barge. Brightoil said: »This achievement has received praise and recognition from ship operators due to the enhanced bunkering effciency and significantly reduced complaints and disputes arising from quantitative differences.« M 2017 Check data of your SHIPYARD online www.ship2yard. com/ ws www.EQUIP4SHIP.com www.SHIP2YARD.com HANSA International Maritime Journal – 154. Jahrgang – 2017 – Nr. 4 27
