Experts update maritime industry at IBIA Asia and Ince IMO 2020 readiness seminar
Experts from the value chain of the bunkering sector gathered at the Singapore office of international legal firm Ince on Thursday (21 November) to discuss latest developments leading to IMO 2020 at the IBIA Asia and Ince IMO 2020 Readiness Seminar.
From 1 January 2020, the limit for sulphur in fuel oil used on board ships operating outside designated emission control areas will be reduced to 0.50% m/m (mass by mass).
“This week, we have been tracking more low sulphur fuel oil (LSFO) deals compared to high sulphur fuel oil (HSFO),” shared Alan Bannister, Head of Asian Business Development at global energy and commodity price reporting agency Argus Media.
“From a volumetric perspective, the shift from HSFO of LSFO is very much underway. In terms of prices, we are seeing very bullish movement for LSFO [versus bearish for HSFO].
“There have been periods where people investing in scrubbers were wondering if they made the right decision; if this kind of price differences continue the people investing in scrubbers will be very happy.”
Captain Ashley Noronha, the Regional Commercial Operations Manager, Pacific at New York-listed marine energy transportation, storage and production company Teekay Tankers, states the company is well positioned to meet requirements for the upcoming 2020 sulphur cap.
“In the ideal world from a shipowner’s perspective, we like to change from HSFO and use LSFO pretty much at the end of December,” he says.
“However, we are planning to start changing fuels from between early December to 20 December; in order to do so, we have to pre-plan for all the eventualities to ensure we will not have any over carriage of HSFO.
“For the final stretch in the home run, we looking at taking minimum HSFO while making sure we do not have HSFO post 2019.”
Maureen Poh, Partner at Ince, advised shipowners to pay close attention to IMO 2020 related documentation and implementation plans in order to present the best position in legal cases – should they arise.
“A lot of things [during legal proceedings] depend on documentation so owners, operators, and managers will need to educate their crew on keeping proper record on what they have done. In the end, if they are faced with a claim documentation will be very important,” she notes.
“The chain of documentation could support your position. If a client wishes to say that fuel caused damage to the vessel it is prudent to put in place proper plans on what everybody does and what they have done. Of course, a part of it is by engaging in recommended testing [of fuels].”
Poh’s recommendation was echoed by Gowri Shankar, Regional Sales Manager at testing organisation Tribocare.
“In terms of 2020, we are seeing more and more paraffinic-rich fuels being submitted to the ships. An issue with these fuels is that they tend not to be compatible with other fuels; as such, the shipowner may consider conducting compatibility checks before they mix the fuels,” he says.
“There will be two categories of fuel being traded post 2020; one will be highly paraffinic while the other will be aromatic/asphaltenic in nature. If mixed, serious stability issues are expected.
“We advise fuel users to stick to ISO 8217:2017 standards and further suggest a compatibility test before mixing.”
Martin Chew, Marine Regional Sales Manager, Asia Pacific, at Colorado-based global specialty chemicals company Innospec, and part of the ISO 8217 committee for marine fuels standards, forecasted the scenario with IMO 2020 compliant bunkers for shipowners.
“I cannot see a near future where there is no guarantee to say one will not encounter any operational issue when stemming with ISO on spec bunkers as currently we can already see on spec marine fuels causing issues,” he shared.
“Trials from major bunker suppliers, where fuels have been carefully selected, also have the same problem. Stability is one issue and compatibility is another. This is something they have pre-warned all end users.”
Moving forward, Alex Tang, the Regional Manager Asia at International Bunker Industry Association (IBIA) Asia, shared IBIA, and others from the shipping, refining, fuel supply and standards sectors, have worked together to produce the Joint Industry Guidance on the supply and use of 0.50% – sulphur marine fuel.
IBIA believes this guide, along with the recently published CIMAC Guideline: Marine fuel handling in connection to stability and compatibility, provides marine fuels and shipping industry stakeholders with “great tools” to manage IMO 2020.
“IBIA is happy to contribute and share co-developed studies with maritime industry stakeholders, we welcome more members to join us in support our endeavour to enhance the global bunker industry,” states Tang.
He encouraged potential IBIA members to sign up before 30 November 2019 to enjoy an extended discount of 25% for annual membership fees as part of the IBIA Annual Turkey 2019 Convention with the discount code: “TURKEY25”.
Photo credit: Manifold Times
Published: 26 November, 2019
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