Global energy and commodity price reporting agency Argus Media on Tuesday (19 March) provided an industry update regarding the alleged use of magnets by a minority of players to influence MFM readings in the Singapore bunkering market:
Singapore bunker market participants are watching the use of magnets to manipulate mass flow meter (MFM) readings in the port, but so far see no major impact on the market from the practice.
Shipowners have been aware of magnet use since Singapore made MFMs mandatory in 2017, but the issue has gained wider prominence in recent days after photographic evidence of such a device apparently being used was circulated by a surveyor last week.
Sporadic evidence indicates magnets are being used in some isolated cases, with some buyers wary that they might be used on a larger scale.
Magnets can be attached to a MFM to manipulate flow measurements. Barge operators can potentially save an estimated 10-15t of fuel when delivering a 2,000t stem.
Buyers are largely unconcerned. "We will exercise caution but we do not think magnets are a very effective manipulation tool," one buyer said.
"The use of a magnet could lead to either a gain or a loss [in fuel readings], with odds being 50-50," another market participant said. And not all types of MFMs are susceptible to the effects of a magnet.
Physical suppliers are more concerned about the reputational impact of the practice. Tampering with MFMs by a small number of operators could damage the integrity of the large majority of participants in Singapore who play by the rules, they said.
Owners are aware of the issue and are applying stricter controls, with prevention methods in place that are covered by the Supplier Guidelines and Surveyor Instructions. Surveyors must report suspicions of magnet use to the Maritime and Port Authority (MPA), in accordance with the Singapore Technical Reference for Bunker Mass Flow Metering (TR48:2015).
Singapore, the world's biggest bunker port, is currently the only port that mandates the use of MFMs for all deliveries of bunker fuel oil. The MPA will extend the requirement to all marine gasoil bunker operations from 1 July 2019.
An increasing number of suppliers in mainland China, Hong Kong and Fujairah are operating MFM-equipped barges following the successful adoption of the technology in Singapore.
Source: Argus Media
Published: 20 March, 2019
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