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Clyde & Co: IMO amends SOLAS to regulate the supply of low flashpoint bunkers

It would be advisable for bunker suppliers and other stakeholders in the bunkering industry to prepare in advance for amendments to Regulation 4.2.1 of Chapter II-2 of SOLAS, says Puneet Sareen.

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International law firm Clyde & Co LLP on Tuesday (28 March) published a market insight advising bunker suppliers and stakeholders in the bunkering industry to prepare in advance for recent amendments to Regulation 4.2.1 of Chapter II-2 of SOLAS, which is expected to come into effect on 1 January 2026: 

By Puneet Sareen, Master Mariner 

It is a known fact that off-specification or contaminated bunkers can disable vessel engines, endangering vessel, crew, and cargo on board and giving rise to significant losses for all parties to the maritime adventure.

The supply of such bunkers has plagued the industry for some time, with the bunker contamination episodes in Houston in early 2018 and Singapore in 2022 being two recent instances. 

Besides the presence of contaminants which can create problems for the safe consumption of bunkers and cause damage to the propulsion machinery, the carriage and consumption of bunkers with a low flashpoint presents an entirely separate safety hazard. 

Typically, bunkers with a flashpoint below 60˚C are deemed unsafe. 

The usage of marine fuels below 60˚C is already prohibited under the International Convention for Safety of Life at Sea (“SOLAS”). 

However, until now, there has been no specific provision within SOLAS against the supply of such bunkers. This lacuna has been the subject of discussion at IMO sub-committees for some time. 

Regulation 4.2.1 of Chapter II-2 of SOLAS

After due consideration of the lack of any regulatory framework in the bunker industry to control the supply of such fuels, recent amendments  to Regulation 4.2.1 of Chapter II-2 of SOLAS have been introduced. 

These amendments are expected to come into effect on 1 January 2026.  

The amendments aim to ensure that the bunkers are safe by requiring that:

  1. The flashpoint is to be determined in accordance with ISO standard 2719:2006 and the test laboratory has to be accredited with ISO/IEC 17025:2017.
  2. The bunker supplier must provide to the ship receiving bunkers:
  • a declaration signed by the bunker supplier that the bunkers conforms with Regulation 4.2.1, Chapter II-2 of SOLAS and the test method used for determining the flashpoint; and
  • a bunker delivery note that specifies the flashpoint of the bunkers or states that the flashpoint has been measured at or above 70˚C.
  1. Where a bunker supplier has been found to have supplied bunkers below a flashpoint of 60˚C, the contracting state is required to notify the IMO and other contracting states.
  2. The contracting state would also have to take “appropriate action” against the bunker supplier. The amendments do not specify what this action should be, so it is left to the contracting state to decide. Taking Singapore as an example, bunker suppliers could face fines and have their bunker supply licences suspended or cancelled. 

Comment

Although some years away, it would be advisable for bunker suppliers and other stakeholders in the bunkering industry to prepare in advance for these amendments, reviewing their practices and ensuring that their bunker delivery notes will fall in line with the new requirements due to take effect in 2026.

 

Photo credit: Shaah Shahidh on Unsplash
Published: 29 March, 2023

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Methanol

China: Cosco Shipping and bp to explore collaboration in methanol bunker fuel 

Duo signed a MoU in Shanghai to expand their scope of strategic cooperation into new areas including lubricant supply, methanol bunker fuel supply for bunkering and offshore wind supply chain.

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China: Cosco Shipping and bp to explore collaboration into methanol bunker fuel

Cosco Shipping on Thursday (7 December) said it has signed  a Memorandum of Understanding (MoU) with bp to expand their scope of strategic cooperation into new areas on 5 December in Shanghai.

“This includes Castrol Marine lubricants and hydrocarbons transportation, offshore equipment as well as exploring collaboration opportunities in areas such as methanol supply for bunkering and offshore wind supply chain,” Cosco said. 

“Together, both parties will further capitalize on the business advantages of both parties, enhance synergies, and achieve complementary advantages and common development.”

William Lin, bp Group Executive Vice President, and Lin Ji, Executive Vice President of COSCO SHIPPING, witnessed the signing. Simon Yang, bp Group Senior Vice President and bp China President, and Chen Wei, Deputy Head of the Operations Division of COSCO SHIPPING, signed the document on behalf of the two parties.

Cosco said bp has been operating in China since the early 1970s and is one of the leading foreign-invested companies in China’s energy industry. 

“bp and Cosco Shipping have a longstanding history of cooperation, including the transportation of energy products, offshore equipment manufacturing services, and the supply of marine fuels and lubricants,” it added. 

Photo credit: Cosco Shipping
Published: 11 December, 2023

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Methanol

Maersk to deploy first large methanol-powered vessel on Asia-Europe trade lane in 2024

Ship will enter service on the AE7 string connecting Asia and Europe, which includes port calls in Shanghai and Tanjung Pelepas in Malaysia, with Ningbo in China, being its first destination.

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Maersk to deploy first large methanol-powered vessel on Asia-Europe trade lane in 2024

A.P. Moller - Maersk (Maersk) on Thursday (7 December) said it was about to launch the first of its 18 large methanol-enabled vessels currently on order. 

On 9 February 2024, the ship will enter service on the AE7 string connecting Asia and Europe, which includes port calls in Shanghai, Tanjung Pelepas, Colombo and Hamburg, with Ningbo, China, being its first destination.

“The container vessel built by Hyundai Heavy Industries (HHI) in South Korea has a nominal capacity of 16,000 containers (TEU) and is equipped with a dual-fuel engine enabling operations on methanol as well as biodiesel and conventional bunker fuel,” the firm said. 

Maersk added it has secured sufficient green methanol to cover the vessel’s maiden voyage and continues to work diligently on 2024-25 sourcing solutions for its methanol-enabled vessel fleet.

“Deploying the first of our large methanol-enabled vessels on one of the world’s largest trade lanes, Asia - Europe, is a landmark in our journey towards our Net-Zero target. With the vessel’s capacity of 16,000 containers, this will make a significant impact in our customers’ efforts to decarbonise their supply chains, and we are looking forward to introducing more methanol-enabled vessels on this and other trades during 2024,” Karsten Kildahl Chief Commercial Officer at Maersk, said. 

Ahead of its deployment, the vessel will be named at the shipyard in end January 2024. The following two sister vessels will be deployed in the first half of 2024 with naming events taking place in Yokohama, Japan, and Los Angeles, USA. Maersk said it was expected to take delivery of four additional sister vessels in the second half of 2024.

At the time of deployment of the first large vessel, it will be the only second container vessel in the world that can sail on green methanol, the first being the feeder vessel Laura Maersk which entered service in September this year.

Overview of Maersk vessels on order

  • Maersk has 24 container vessels on order
  • All vessels currently on order will be equipped with dual-fuel engines and will be able to operate on green methanol
  • 12 of the vessels on order have a capacity of 16,000 TEU (Twenty-foot Equivalent Unit containers)
  • 6 of the vessels on order have a capacity of 17,000 TEU
  • 6 of the vessels on order have a capacity of 9,000 TEU
  • Since 2021, Maersk has had a policy of only ordering new vessels able to operate on green fuels

About Maersk’s AE7 service string

  • The AE7 string connects Asia and Europe through the Suez Canal
  • The AE7 string has the following port calls: Ningbo, Shanghai, Nansha, Yantian (all China), Tanjung Pelepas (Malaysia), Colombo (Sri Lanka), Port Tangiers (Morocco), Felixstowe (UK), Hamburg (Germany), Antwerp (Belgium), London Gateway (UK), Le Havre (France), Port Tangiers, Jeddah (Saudi Arabia), Abu Dhabi (UAE) and Jebel Ali (UAE)

Photo credit: A.P. Moller - Maersk
Published: 11 December, 2023

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VLSFO

ENGINE: Petrobras’ new bunker price mechanism adds to Brazil market shake-up

With a new pricing mechanism now in place since 1 November, Petrobras bunker prices can change anytime throughout the day and final prices will depend on enquiries, a source says.

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Seguro, Brazil by Gabriel Martins

Since Brazilian petroleum firm and bunker supplier Petrobras shifted from posted bunker prices to indicative prices, Santos’ VLSFO discounts to Brazilian and foreign ports have narrowed.

Petrobras started issuing indicative bunker prices for Brazilian ports on 1 November, shifting from its usual pricing mechanism of posted prices. These posted prices were mostly fixed in nature, and did not tend to change despite movements in underlying crude values.  

With a new pricing mechanism now in place, Petrobras bunker prices can change anytime throughout the day and final prices will depend on enquiries, a source says. The new pricing has been reflected in Brazilian bunker price dynamics.

Santos’ VLSFO price discount to Zona Comun’s VLSFO has come down from peak levels of $50/mt in September to around $35/mt in October and November and has further slid to just $4/mt.

VLSFO prices have also changed rapidly between Brazilian ports in recent weeks. Rio Grande’s VLSFO premium over Santos momentarily shrunk from nearly $40/mt in November to just $8/mt earlier this week, but then widened back to $42/mt.

Some argue that Petrobras decided to change the pricing mechanism because of the rise in competition in the Brazilian market. In recent months, several suppliers such as Ipiranga and Bunker One have expanded their Brazilian bunker operations, offering new grades and entering new ports in Brazil. Raizen also started VLSFO supply in the port of Itaqui and São Luiz in July this year.

Another source says that competition is mostly between Brazilian ports - as opposed to with foreign ports. Ships calling in Brazil will be able to pick and choose bunker-only ports with the best offers. Meanwhile, those vessels calling in Argentina will ideally pick bunkers from Zona Comun rather than Brazilian ports, the source adds.

By Nithin Chandran

Source: ENGINE
Photo credit: Gabriel Martins on Unsplash
Published: 11 December, 2023

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