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Contactless bunkering operations at Singapore port ‘raises questions’ on remedies in event of breach

Senior Associate at Clyde & Co offers guidance to protect shipowners and bunker tanker operators in the event opposing counterparty breaches Covid-19 protocols, resulting in Covid-19 transmission.

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The following advice on legal responsibility during contactless bunkering operations at Singapore port amidst the Covid-19 pandemic has been written by Paul Collier, Senior Associate at global law firm Clyde & Co; the write-up was made possible through an arrangement led by the Singapore Chamber of Maritime Arbitration (SCMA):

The risk of COVID-19 spreading during bunkering operations remains a significant concern for vessel operators, bunker suppliers and authorities, particularly where vessels have previously called at ports with high infection rates.

In addition to the health impact on crew and shore staff, the transmission of COVID-19 during bunkering operations can also cause significant financial impact. If cases of COVID-19 are identified, crew are likely to be ordered to quarantine or self-isolate, and vessels and bunker barges prevented from performing their planned future employment. Bunker suppliers are concerned of the risk of repetition of the circumstances of the “NewOcean 6”, where several crew members tested positive for COVID-19 and the bunker tanker was forced to cease operations and quarantine.

Generally, standard bunker terms and conditions do not include express terms dealing with the risk of COVID-19 transmission. However, given the serious consequences and financial impact potentially arising from the transmission of COVID-19 during bunkering operations, bunker suppliers and purchasers may wish to consider including additional contractual obligations requiring their counterparties to comply with COVID-19 protocols.

The Maritime and Port Authority of Singapore has issued circulars which provide that contactless bunker operations must be carried out. The MPA circulars provide (amongst other things) that a receiving vessel’s crew must not board a bunker barge (and vice-versa), and that the receiving vessel’s crew (instead of the bunker barge crew) are to connect the fuel hose at the receiving vessel’s manifold.

It is in the interest of all parties to take all steps to reduce the risk of transmission of COVID-19 and comply with the MPA circulars in Singapore. However, there is a question as to what remedies a bunker supplier or purchaser will have if their counterparty breaches COVID-19 protocols, resulting in COVID-19 transmission. Under the standard wording of many bunker contracts, it may be difficult for bunker suppliers or purchasers to recover any losses which result from a failure or lapse in the counterparty’s compliance with COVID-19 protocols. Further, the ability to claim damages may be limited by contractual provisions restricting the ability to recover consequential losses.

If they are not already doing so, bunker suppliers and purchasers may therefore wish to press for express contractual wording providing that for bunkering operations taking place in Singapore, the other party will comply with all their obligations under the latest MPA circulars, so that if there is a breach of COVID-19 protocols by the other party leading to COVID-19 infection of their crew, there is a clearly identifiable breach of contract which they can use as an avenue to seek to recover losses. Separately, bunker suppliers may wish to consider whether their contractual terms should be amended to protect their position if there is any loss arising from a failure of the receiving vessel’s crew to properly connect the fuel hose, and whether any additional arrangements need to be made in respect of witness sampling at the receiving vessel’s manifold, given the movement restrictions between vessels.

Paul Collier
Senior Associate,  Clyde & Co Clasis Singapore Pte. Ltd.
Direct Dial: +65 6544 6569
Email: [email protected]

 

Photo credit: Manifold Times
Published: 21 July, 2021

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Wind-assisted

Singapore: EPS orders its first wind-assisted propulsion system for tanker

Firm signed a contract for its first ever wind-assisted propulsion system, partnering with bound4blue to install three 22-metre eSAILs® onboard “Pacific Sentinel”.

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Singapore: EPS orders its first wind-assisted propulsion system for tanker

Singapore-based Eastern Pacific Shipping (EPS) on Thursday (22 February) said it signed a contract for its first ever wind-assisted propulsion system, partnering with bound4blue to install three 22-metre eSAILs® onboard the Pacific Sentinel

The turnkey ‘suction sail’ technology, which drags air across an aerodynamic surface to generate exceptional propulsive efficiency, will be fitted later this year, helping the 183-metre, 50,000 DWT oil and chemical tanker reduce overall energy consumption by approximately 10%, depending on vessel routing.

Suitable for both newbuilds and retrofit projects, the system delivers energy efficiency and cost savings for a broad range of vessels, regardless of their size and age.

Singapore: EPS orders its first wind-assisted propulsion system for tanker

José Miguel Bermudez, CEO and co-founder at bound4blue, said: “Signing an agreement with an industry player of the scale and reputation of EPS not only highlights the growing recognition of wind-assisted propulsion as a vital solution for maximising both environmental and commercial benefits, but also underscores the confidence industry leaders have in our proven technology.”

“It’s exciting to secure our first contract in Singapore, particularly with EPS, a company known for both its business success and its environmental commitment.”

“We see the company as a role model for shipping in that respect. As such this is a milestone development, one that we hope will pave the way for future installations across EPS’ fleet, further solidifying our presence in the region.”

Cyril Ducau, Chief Executive Officer at EPS, said: “EPS is committed to exploring and implementing innovative solutions that improve energy efficiency and reduce emissions across our fleet.” 

“Over the past six years, our investments in projects including dual fuel vessels, carbon capture, biofuels, voyage optimisation technology and more have allowed us to reduce our emissions intensity by 30% and achieve an Annual Efficiency Ratio (AER) of 3.6 CO2g/dwt-mile in 2023, outperforming our emission intensity targets ahead of schedule. The addition of the bound4blue groundbreaking wind assisted propulsion will enhance our efforts on this path to decarbonise.”

“With this project, we are confident that the emission reductions gained through eSAILs® on Pacific Sentinel will help us better evaluate the GHG reduction potential of wind assisted propulsion on our fleet in the long run.”

Pacific Sentinel will achieve a ‘wind assisted’ notation from class society ABS once the eSAILs® are installed. 

 

Photo credit: Eastern Pacific Shipping
Published: 23 February, 2024

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Crime

Vietnam: Two ships seized over 170,000 litres of unknown origin diesel oil

Vietnam Coast Guard said vessels were transporting various quantities of oil cargo: KG-91487- DR was transporting about 145,000 litres and KG-91602-TS transported about 25,000 litres.

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Vietnam: Two ships seized over 170,000 litres of unknown origin diesel oil

The Vietnam Coast Guard on Tuesday (20 February) said it seized a total of about 170,000 litres of unknown origin diesel oil in an operation. 

Patrol boats belonging to Coast Guard Region 4 Command detected two fishing boats – KG-91487- DR and KG-91602-TS – displaying several suspicious signs.

Initial investigations found all vessels without invoices and documents proving legal origin of the oil material.

The vessels were transporting various quantities of oil material: KG-91487- DR was transporting about 145,000 litres and KG-91602-TS transported about 25,000 litres.

The authorities made records of administrative violations,and escorted the vessels to Fleet Port 422 in Phú Quốc city, Kiên Giang province for further investigations and handling in accordance with the law.

 

Photo credit: Vietnam Coast Guard
Published: 23 February, 2024

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LNG Bunkering

Galveston LNG Bunker Port joins SEA-LNG coalition

SEA-LNG said move will further enhance its LNG supply infrastructure expertise and global reach, while giving GLBP access to the latest LNG pathway research and networking opportunities.

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Galveston LNG Bunker Port joins SEA-LNG coalition

Galveston LNG Bunker Port (GLBP), a joint-venture between Seapath Group, one of the maritime subsidiaries of the Libra Group, and Pilot LNG, LLC (Pilot), a Houston-based clean energy solutions company, has joined SEA-LNG, according to the latter on Wednesday (21 February). 

SEA-LNG said the move will further enhance its LNG supply infrastructure expertise and global reach, while giving GLBP access to the latest LNG pathway research and networking opportunities.

GLBP was announced in September 2023 and will develop, construct and operate the US Gulf Coast’s first dedicated facility supporting the fuelling of LNG-powered vessels, expected to be operational late-2026.

The shore-based LNG liquefaction facility will be located on Shoal Point in Texas City, part of the greater Houston-Galveston port complex, one of the busiest ports in the USA. This is a strategic location for cruise ship LNG bunkering in US waters, as well as for international ship-to-ship bunkering and cool-down services. GLBP will offer cost-effective turn-key LNG supply solutions to meet growing demand for the cleaner fuel in the USA and Gulf of Mexico.

Jonathan Cook, Pilot CEO, said: “With an initial investment of approximately $180 million, our LNG bunkering facility will supply a vital global and U.S. trade corridor with cleaner marine fuel. We recognise that SEA-LNG is a leading partner and a key piece of the LNG bunkering sector, and will give us access to insights and expertise across the entire LNG supply chain.

“LNG supports environmental goals and human health by offering ship operators immediate reductions in CO2 emissions and virtually eliminating harmful local emissions of sulphur oxides (SOx), nitrogen oxides (NOx) and particulate matter.”

President of Seapath, Joshua Lubarsky, said: “We are very pleased to be supporting the decarbonization of the maritime industry through strategic, and much needed, investments into the supply of alternative fuels.  We are also happy to be a part of SEA-LNG which has done a wonderful job in advocating for advancements in technology in this vital sector.”

Chairman of SEA-LNG Peter Keller, said: “We’re proud to welcome another leading LNG supplier to the coalition and are looking forward to a mutually beneficial relationship. With every investment in supply infrastructure in the US and worldwide, the LNG pathway’s head start increases. Global availability, alongside bio-LNG and e-LNG development, makes LNG the practical and realistic route to maritime decarbonisation.

“All alternative fuels exist on a pathway from grey, fossil-based fuels to green, bio or renewable fuels. Green fuels represent a scarce resource and many have scalability issues, so we must start our net-zero journey today with grey fuels. LNG is the only grey fuel that reduces greenhouse gas emissions, well-to-wake, so you need less green fuel than alternatives to improve emissions performance.”

 

Photo credit: SEA-LNG
Published: 23 February, 2024

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