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Bunker Fuel

Law firm HFW: Dual fuel, double trouble?

In recent months, HFW has advised on a number of claims concerning dual-fuelled LNG carriers or LNG-powered vessels, where traditional bunker fuels have not been consumed within their shelf-life.
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RESIZED Shaah Shahidh on Unsplash

William Gidman, Partner and Mike Bunton, Master Mariner, of global law firm HFW, in a recently published article, discussed on the rise in claims relating to the management of dual-fuelled vessels and advised both owners and charterers to  monitor the condition of LNG and traditional bunker fuels on board dual-fuelled vessels carefully:

The drive for sustainability in shipping, particularly as a result of FuelEU, which took effect on 1 January 2025, is leading to significant growth in the use of dual-fuelled vessels.

The most common of these can consume both traditional fuels (like VLSFO) and LNG. We are now seeing an increase in claims relating to the management of dual-fuelled vessels, which suggests that developments are required both in practice and in drafting time charterparties to keep pace with the use of progressive fuel technologies.

Shelf-life of traditional fuels

In recent months, HFW has advised on a number of claims concerning dual-fuelled LNG carriers (or LNG-powered vessels), where traditional fuels have not been consumed within their shelf-life, meaning they are no longer fit for use and must be de-bunkered. This often arises during periods where the price for LNG has been lower than the price for traditional fuels, so that charterers opt to run the vessel on LNG as much as possible to save costs. This practice can present a significant risk for charterers, as the diminution in the value of the de-bunkered fuel is not ordinarily insurable. 

CIMAC, a non-profit association promoting the development of ship propulsion and power, suggests that whilst HSFO can have a two-year shelf life, this can be reduced to between three and six months for VLSFO. Three months could be a relatively short window in which to use VLSFO, particularly if the gas price is low so that it is used as the secondary fuel on board.

Whose job is it to monitor the condition of fuels on board a vessel and how do time charterparties deal with the management of two fuels? Your immediate reaction may well be that, of course, it is the charterers’ responsibility to decide when to use their own fuels, but the answer is not that straightforward. We explore this further below.

Relevant charterparty clauses

A time charterparty will invariably provide a minimum specification for fuel supplied by charterers (e.g. ISO 8217:2017). BIMCO also developed an LNG fuel quality clause in 2021, providing an LNG specification. 

There could be other express clauses in a time charterparty under which charterers warrant that the fuel will be fit to be consumed in the vessel’s engines (at the time it is consumed). In addition, the implied indemnity could bite if the vessel’s engines are damaged by complying with charterers’ orders to consume the charterers’ fuel.

Whilst helpful, these clauses do not set out responsibility for monitoring the condition of fuels to ensure they are consumed within their usable lifespan.

Fuel management

Owners are required by the International Safety Management (ISM) Code to implement and maintain on board a Safety Management System (SMS) which sets out owners’ risk assessments and operational procedures. This should include bunkering procedures and bunker quality assessment/testing prior to use, which would form part of a bunker management plan, and should include monitoring different grades in different tanks. The SMS is also required to identify critical equipment and systems, such as propulsion systems, and include specific measures to ensure their reliability, incorporating this into the Planned Maintenance System (PMS). 

On a dual-fuelled LNG vessel, where VLSFO is the secondary fuel and may have a short, three month lifespan, it would be prudent for Owners to update the SMS and PMS to extend the fuel sampling and testing requirements after bunkering to monitor both fuels on board. This should be based on the assessment of lifespan of the fuels, in order to ensure that the traditional fuel remains fit for purpose and that they do not become a failure point of critical systems when needing to change over fuels.

This is particularly the case given that:

  • it may not be permitted to use LNG as the vessel’s fuel in port or other congested waterways.
  • there is normally a minimum safety reserve for traditional fuels so that they can be used in an emergency.

It is therefore important that owners test and monitor both fuels regularly so that the vessel is ready to change fuels at any time when required (emergency or not). This is not to suggest that owners’ SMS monitoring and testing requirements mean that charterers bear no risk for the degradation of charterers’ fuels. However, in light of the reality of fuel degradation, it would be good practice for owners to do so and could protect against circumstances in which they may be exposed to a claim for breach of reasonably prudent SMS bunker monitoring requirements, which lead to a vessel being unable to use traditional fuels when required. It is possible in this scenario that the failure to have a reasonably prudent SMS bunker monitoring system could amount to a breach of due diligence seaworthiness before and at the start of the voyage (following the line of authority in the CMA CGM LIBRA).

Bailment

Under a time charterparty, the bunkers purchased by charterers on delivery and throughout the charter period remain their property, but the owners will hold the fuel in their possession as bailee. The bailment relationship between the parties will broadly be on the terms of the charterparty (bailment on terms) and may extend to a duty on owners to take reasonable care of the charterers’ property. 

Again, it is not suggested this bailment obligation would place responsibility for natural fuel degradation on owners; however, it may place a further similar obligation on them (to that found in the SMS) to reasonably monitor the fuels and to notify the charterers if there are signs of degradation. 

Sustainability benefits

In addition to monitoring the quality of traditional fuels on a dual-fuelled vessel, issues can arise in relation to the low carbon fuel on board. One of the key drivers for chartering a dual-fuelled vessel may be to benefit from low GHG / carbon fuels under sustainability regulations such as FuelEU. For example, an operator of a dual-fuelled LNG carrier may be able to monetise the use of LNG fuel in vessels trading to, from or within the EU by means of pooling.

If there is a breach of charter and/or fuel monitoring by owners which leads to the inability of charterers to use the low GHG / carbon fuels on board, this could give rise to commercial losses for charterers. 

Calculating the financial losses flowing from this could be complex, particularly where the vessel has been chartered for less than one reporting year under the applicable regulation. One solution would be for owners and charterers to agree in the charterparty a liquidated damages regime which defines the financial compensation due to charterers in such circumstances (thus avoiding potentially complex and time-consuming litigation).

Conclusions

Both owners and charterers should monitor the condition of both fuels on board dual-fuelled vessels carefully and owners should develop, document and implement an appropriate SMS bunker management plan specifically for dual-fuelled vessels. To avoid and simplify any future disputes, it would be prudent to include clauses in dual-fuelled vessel time charterparties covering:

  • the management, monitoring and reporting to charterers of the condition of both fuels.
  • actions to be taken if one fuel is unavailable.
  • liquidated damages as compensation if the non-availability of one fuel gives rise to losses.

Dual-fuelled vessels will become the norm in the foreseeable future. In our view, it would be prudent to spend time on developing good practice and agreeing appropriate charterparty terms now, so as to avoid complicated and costly issues arising in the future.

 

Photo credit: Shaah Shahidh on Unsplash
Published: 23 June, 2025

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Newbuilding

Singapore: Pinnacle Marine’s first B100 fuelled utility boat starts 1,000-hour research trial

Newbuilding operated by Prestige Ocean Pte Ltd will capture data on bunker fuel emissions, marine fuel behaviour, and performance.
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President MT

The 50th vessel constructed by local boat builder Pinnacle Marine (Singapore) Pte Ltd, namely President 100, is starting 1,000 hours of real-time research trials in collaboration with several parties from Wednesday (9 July) onwards, it says.

Powered by B100 biodiesel, the newbuilding operated by Prestige Ocean Pte Ltd will capture data on bunker fuel emissions, marine fuel behaviour, and performance.

It will be participating in trials with Maritime Energy & Sustainable Development Centre of Excellence (MESD), Weichai Singapore, China Classification Society, Pacific International Lines (PTE) Ltd, Abo Shoten, Ltd. / 株式会社安保商店 , Abo Singapore, Wilmar International, Gulf Marine, Amspec Testing & Services, and AYK Engineering and Consulting.

President MT 02

The President 100, Pinnacle Marine’s first full biodiesel utility boat, was launched on Tuesday in the presence of over 100 guests.

“Our latest vessel, President 100, merges legacy and future. Named after our first aluminium boat (“President”) and inspired by B100 biodiesel, it leads the charge for our next 50 vessels — many of which will embrace green technology,” stated Pinnacle Marine in a LinkedIn post.

“The launch was amazing, with strong turnout from across the maritime sector — authorities, shipowners, operators, agencies, chandlers, researchers, offshore engineers, and petrochemical suppliers.”

It added: “We’re excited to see how it paves the way for wider adoption of B100 biodiesel — a cleaner, sustainable path for Singapore’s harbour craft sector.”

 

Photo credit: Pinnacle Marine (Singapore) Pte Ltd
Published: 9 July 2025

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Newbuilding

BHP awards charter contracts for two ammonia dual-fuelled bulk carriers

BHP continues to work with the maritime industry to develop an ammonia bunkering plan for the two vessels when they are delivered from 2028.

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July 9, 2025

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BHP ammonia DF charters

Global resources company BHP on Wednesday (2 July) signed contracts with COSCO Shipping Bulk Co., Ltd., a subsidiary of COSCO shipping Group (COSCO Shipping) for the charter of two ammonia dual-fuelled Newcastlemax bulk carriers.

The new vessels to be built under this arrangement will be two of only a handful of vessels in the world capable of using ammonia as a bunker fuel.

The two vessels, expected to be delivered from 2028, will primarily transport iron ore from Western Australia to Northeast Asia.

When run on lower or low to zero greenhouse gas (GHG) emissions ammonia, these vessels will be capable of reducing GHG emissions by at least 50% and up to 95% on a per voyage basis compared to a conventionally fuelled voyage.

The five-year time charter contracts are expected to contribute towards a reduction in the GHG emissions intensity of BHP chartered shipping.

BHP continues to work with the maritime industry to develop an ammonia bunkering plan – the process of fuelling ships with ammonia – for the two vessels when they are delivered from 2028.

Sourcing lower and low to zero GHG emissions ammonia is subject to an ongoing tender process.

 

Photo credit: BHP
Published: 9 July 2025

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Bunker Fuel Availability

ENGINE: East of Suez Bunker Fuel Availability Outlook (8 July 2025)

VLSFO and HSFO lead times vary widely in Singapore; several Chinese ports suspended due to Typhoon Danas; availability good in Sri Lankan ports.
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RESIZED ENGINE East of Suez

The following article regarding regional bunker fuel availability outlook for the East of Suez region has been provided by online marine fuels procurement platform ENGINE for publication on Singapore bunkering publication Manifold Times:

  • VLSFO and HSFO lead times vary widely in Singapore
  • Several Chinese ports suspended due to Typhoon Danas
  • Availability good in Sri Lankan ports

Singapore and Malaysia

VLSFO lead times in Singapore remain highly variable. Some suppliers are quoting as few as six days, while others recommend booking up to two weeks in advance due to long-term nominations—typically contract-based stems that take priority over spot demand. Tight loading schedules at some terminals have further contributed to the delays.

Lead times for LSMGO in Singapore have increased, with most suppliers now advising 6–9 days, up from 2–8 days last week. HSFO lead times also vary widely, ranging from 3–12 days, compared to 9–14 days last week.

In Malaysia’s Port Klang, VLSFO and LSMGO remain readily available, with prompt delivery possible for smaller parcels. However, HSFO supply continues to be tight.

East Asia

VLSFO supply in Zhoushan remains steady amid muted demand, with lead times slightly improving to 4–6 days from 5–7 days last week. Most suppliers are well-stocked, but delays in replenishment cargoes have led some to raise prices in anticipation of tighter availability, a trader noted. This has added further upward pressure on the grade’s price.

For other grades, HSFO lead times have extended to 5–7 days, up from 4–6 days last week, while LSMGO lead times have risen more sharply to 4–6 days from the previous 2–4 days.

However, bunker operations at Zhoushan’s outer and inner anchorages have been suspended since Sunday due to adverse weather caused by Typhoon Danas, according to a source.

The typhoon made landfall in Taiwan’s Chiayi County on Sunday and has since weakened. A second landfall is expected between Taizhou in Zhejiang and Ningde in Fujian on Tuesday afternoon or evening, according to China’s Ministry of Water Resources.

Full resumption of port operations is anticipated by Thursday, when conditions are expected to stabilise.

Several other ports across South China and the Yangtze River Delta have also suspended operations since Sunday, the source added.

In northern China, Dalian and Qingdao continue to offer good availability of both VLSFO and LSMGO. However, HSFO remains scarce in Qingdao. Tianjin is currently facing tight supply across all three fuel grades—VLSFO, LSMGO, and HSFO.

In Shanghai, VLSFO and HSFO remain in limited supply, while LSMGO stocks are relatively stable. Further south, availability varies: Fuzhou is experiencing restricted supply of both VLSFO and LSMGO, whereas Xiamen has sufficient VLSFO but limited LSMGO. In Yangpu and Guangzhou, prompt deliveries of both VLSFO and LSMGO remain challenging.

In Hong Kong, lead times for all fuel grades remain stable at around seven days. However, forecasts indicate adverse weather between 9–11 July, which could disrupt bunker deliveries.

Meanwhile, bunker operations at Taiwan’s Kaohsiung and Taichung ports resumed today after being suspended yesterday due to Typhoon Danas, according to another source. Currently, lead times at both Kaohsiung and Taichung are approximately 3–4 days for VLSFO and LSMGO. At other major Taiwanese ports, such as Hualien and Keelung, lead times are shorter—around two days.

In South Korea, LSMGO availability remains tight as more bunker buyers have shifted to Korean ports, where the grade is currently priced lower than in neighbouring Chinese ports. Busan’s LSMGO is now priced $16/mt below Zhoushan’s.

Lead times for LSMGO have widened significantly, now ranging from 4–14 days, up from 4–10 days last week. In contrast, availability for VLSFO has improved, with lead times shortening from 4–6 days to just 2–4 days. HSFO lead times have also eased, dropping from around five days last week to 2–4 days now.

However, bunker operations may be impacted by adverse weather across several ports. Ulsan and Onsan could see disruptions from 10–11 July, Busan from 8–14 July, Daesan and Taean from 11–12 July, and Yeosu from 11–14 July.

VLSFO supply remains robust at key Japanese ports such as Tokyo, Chiba, Yokohama, and Kawasaki. However, prompt availability is more limited in Osaka, Kobe, Sakai, and Mizushima, and remains particularly constrained in Nagoya and Yokkaichi.

LSMGO is generally well-stocked across the country, though securing prompt deliveries remains a challenge in several ports—including Osaka, Kobe, Sakai, Nagoya, Yokkaichi, and Mizushima. HSFO supply is steady overall, but prompt delivery is likewise restricted at these same ports.

In Oita, availability remains tight across all fuel grades.

Adverse weather is forecast to disrupt bunker deliveries at Thailand’s Koh Sichang and Laem Chabang ports on 9 July. In Vietnam, rough sea conditions are also expected to affect bunker operations in Ho Chi Minh on 10 July and again between 13–14 July.

Oceania

In Western Australia, VLSFO and LSMGO are readily available at Kwinana, Fremantle, and Port Kembla, with suppliers recommending lead times of 7–8 days.

In New South Wales, LSMGO supply remains steady in Sydney, though prompt deliveries of HSFO continue to face challenges.

Victoria’s ports—Melbourne and Geelong—have good availability of both VLSFO and LSMGO, but HSFO remains limited, particularly for prompt requirements.

In Queensland, VLSFO and LSMGO are well-stocked at Brisbane and Gladstone, with typical lead times of around seven days. However, HSFO availability in Brisbane remains tight.

Across the Tasman, VLSFO is sufficiently available in both Tauranga and Auckland. That said, bunker operations in Tauranga could be affected by adverse weather conditions forecast for 11–12 July.

South Asia

VLSFO supply remains tight across several Indian ports—including Mundra, Kandla, Mumbai, Tuticorin, Chennai, Visakhapatnam, Cochin, and Haldia—extending the supply constraints observed in recent weeks. LSMGO availability at most Indian ports continues to be handled on an enquiry basis.

The dock workers’ union has announced a one-day strike in Mumbai from 9–10 July, with plans to extend the action to Cochin thereafter. Cargo operations in Mumbai are unlikely to face major disruptions, as most terminals there are privately operated. However, operations at Cochin are expected to be affected, according to GAC Hot Port News.

Adverse weather is also set to hamper bunker activity at multiple Indian ports. Disruptions are forecast at Kandla and Sikka on 9 July, and at Visakhapatnam and Mumbai from 8–9 July.

In Sri Lanka, lead times for all fuel grades at Colombo and Hambantota have improved significantly, dropping to around two days from approximately six days last week. However, rough weather conditions expected in Colombo between 11–12 July could impact bunker operations.

Middle East

In Fujairah, VLSFO requires lead times of approximately 5–7 days, slightly improved from last week’s recommendation of around 6 days. Lead times for LSMGO and HSFO remain steady at about 5–7 days, showing little change compared to the previous week.

In Basrah, Iraq, both VLSFO and LSMGO are readily available, although HSFO supply remains limited. In Jeddah, Saudi Arabia, availability of both VLSFO and LSMGO is constrained.

At Egypt’s Suez port, stocks of all three conventional bunker grades, VLSFO, LSMGO, and HSFO, are nearly depleted. In Qatar’s Ras Laffan, the supply of VLSFO and LSMGO is currently tight.

Djibouti is facing significant supply pressure, with VLSFO and HSFO nearly out of stock, and LSMGO availability also limited.

On the other hand, Omani ports—including Sohar, Salalah, Muscat, and Duqm—continue to report stable LSMGO supply.

By Tuhin Roy

 

Photo credit and source: ENGINE
Published: 9 July, 2025

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