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Indonesia: Bunkering locations for LSFO marine fuel expand during first six months of IMO 2020

03 Jul 2020

Indonesia’s bunkering sector has adapted to prevailing market conditions with IMO 2020 compliant marine fuel now available at more locations than before, informs the Managing Director of Jakarta-based bunker supplier Trillion Energy.

“Indonesia started its IMO 2020 debut with low sulphur fuel oil (LSFO) being available only at two locations, namely Tanjung Priok [located in Jakarta] and Balikpapan, back in January 2020,” Henri Sentosa told Manifold Times in an interview.

“To date, six months into IMO 2020, the supply of LSFO marine fuel has expanded to Surabaya, Makassar and Panjang due to Pertamina’s efforts to increase accessibility of the product.

“In the near future, we expect LSFO to be available at Ambon, Batam, Cilacap and Padang; hence making the product within reach across the archipelago.”

Sentosa shared the main bunkering ports of Indonesia are Jakarta, Surabaya, Balikpapan and Makassar; he explained the Indonesia marine fuels market comprised of businesses from the domestic and international shipping sectors.

“Due to the geography of Indonesia, sales of marine fuel from the domestic market continue to be much bigger in terms of volume when compared to the international market,” he explains.

Indonesia’s bunkering sector, however, is not without its unique challenges; the government as well as state-owned oil major Pertamina, which dominates LSFO production within the country, will need adjustment to maximise the country’s potential as an attractive bunkering option for international vessels, suggests Sentosa.

“Bunker prices in Indonesia are always at a premium compared to neighbours like Singapore and Malaysia. This is caused by various reasons such as taxes (e.g. VAT of 10%), fuel distribution costs, ageing refineries, and exposure to currency volatility,” he says.

“LSFO in Indonesia are mainly produced by Pertamina and hence local specifications apply. Though it is understood the product largely complies with ISO8217 specifications, it is not something that resellers are able to guarantee at the point of sale.

“Due to the biodiesel program initiated by the Indonesia government, gasoil products (including marine gas oil) are mandated to be blended with 30% FAME content (B30) which is unfamiliar to international vessels and may raise questions on the handling of the fuel. However, our experience so far with B30 supplies has been smooth and we have not faced any technical complaints with regards to B30 usage.”

Ultimately, potential issues during bunkering operations can be best avoided through clear communication with clients, believes Sentosa.

“Our modus operandi at Trillion Energy is to provide information and transparency with business partners. When working on a bunker enquiry, we are always upfront with our clients if there are any potential operational issues,” he says.

“We also provide solutions for vessels who are going to ports without available bunkering facilities by understanding their routes and schedules. This may be by mobilising our barges to the vessel’s location, or by providing alternative refuelling options.”

Trillion Energy was established in 2013 as a trader of marine fuels in Indonesia. Today, the company has grown to become owners and operators of its own fleet of Balikpapan-based bunker tankers which are able to shuttle between various ports in Indonesia.

The firm is also an appointed fuel agent and transporter for PT. Pertamina (Persero), the state-owned oil major in Indonesia.

Contact details of Henri Sentosa and his bunker sales team at Trillion Energy are available here.

Related: Indonesia Ministry of Transport confirms country’s IMO 2020 decision
Related: Indonesia: Decision to allow domestic consumption of 3.5%S marine fuel ‘makes sense

 

Photo credit: Trillion Energy
Published: 3 July, 2020

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