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Analysis

MPA completes investigations into bunker fuel contamination; temporary suspends Glencore’s Bunkering Licence

MPA has also asked Glencore to improve its internal procedures to ensure that prompt action is taken in future when it becomes aware of, or reasonably suspects, any irregularity in fuel quality, it states.

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The Maritime and Port Authority of Singapore (MPA) on Wednesday (3 August) said it has completed investigations into bunker fuel contamination in Singapore port.

Background:

MPA was notified on 14 March 2022 that a number of ships had been supplied with High Sulphur Fuel Oil (HSFO) containing high concentration levels of Chlorinated Organic Compounds (COC) (1,2-Dichloroethane, Tetrachloroethylene) in the Port of Singapore. MPA provided two interim updates on 13 April 2022 and 5 May 2022.

The following are the conclusions of MPA:

Key Findings

MPA earlier updated on 5 May 2022 that the source of the affected HSFO fuel containing high concentration levels of COC, supplied by Glencore Singapore Pte Ltd (Glencore) and PetroChina International (Singapore) Pte Ltd (PetroChina) [1], was traced to fuel loaded on a tanker at the Port of Khor Fakkan, United Arab Emirates. Forensic fingerprinting analysis of the fuel samples taken from the tanker showed a match with samples taken from several affected ships that had taken HSFO from both Glencore and PetroChina.

MPA also established that both Glencore and PetroChina, as MPA-licensed bunker suppliers, had carried out tests on the fuel supplied to ships prior to their sale based on the international standards of petroleum products of fuel - International Organization for Standardization 8217 (ISO 8217) [2]

MPA found no evidence that Glencore or PetroChina had intentionally contaminated the HSFO.

Action taken against Glencore for contravention of MPA’s Bunkering Licence Terms and Conditions 

Between 21 and 23 March 2022, the fuel oil testing laboratory engaged by Glencore reported results showing that the samples taken from the parcels of fuel oil Glencore purchased, contained concentrations of COCs that ranged from approximately 2,000 ppm to 15,000 ppm. COCs are not commonly present in bunker fuel, especially at such elevated levels.

MPA’s investigation found that despite this, Glencore continued to supply bunkers blended with the fuel purchased that was contaminated with high levels of COC to vessels in the Port of Singapore from 22 March 2022 to 1 April 2022.

By doing so, Glencore contravened the terms and conditions of its Bunkering Licence (Bunker Supplier) in failing to ensure that no bunkers supplied by it were contaminated. Glencore was given the opportunity to comment on these findings before MPA finalised its conclusions.

A total of 24 vessels were supplied with the affected fuel by Glencore from 22 March to 1 April 2022, and at least 3 vessels have reported issues with their fuel pumps and engines.

MPA will suspend Glencore’s Bunkering Licence (Bunker Supplier) for two months with effect from 18 August 2022. MPA has also asked Glencore to improve its internal procedures to ensure that prompt action is taken in future when it becomes aware of, or reasonably suspects, any irregularity in fuel quality.

No action taken against PetroChina 

MPA’s investigation also revealed that PetroChina had stopped delivery of the contaminated fuel promptly by 19 March 2022 once it received its own test results that the fuel it supplied was contaminated with COC. MPA has therefore decided not to take any action against PetroChina.

Licensed Bunker Suppliers to Strictly Adhere to the Terms and Conditions of Licences

MPA takes compliance with its bunkering licensing regime seriously.

MPA has reminded all licensed bunker suppliers to adhere strictly to the terms and conditions of their licences. MPA takes a serious view of contraventions of the bunker supplier licence terms and conditions, and will not hesitate to suspend or cancel the relevant licences, where necessary. MPA has also reminded licensees to immediately report to MPA any irregularity in any bunker operation or contravention of any provision under the terms and conditions of their bunker supplier licence.

MPA to Work Together with Shipping Industry to Strengthen Fuel Quality Checks

MPA’s quality fuel assurance measures comprise the Bunker Quality Inspection System (BQIS) and the Intensified Bunker Quality Checks (IBQC). The BQIS tests the quality of bunkers supplied to vessels while the IBQC tests bunkers carried by bunker tankers before supply to vessels. On average, over 1,300 bunker samples are tested annually under the BQIS and IBQC to verify compliance with ISO 8217. While the occurrence of COC is rare in bunkers, MPA has now included COC to be tested under both BQIS and IBQC.

MPA and the Singapore Shipping Association (SSA) will co-chair an industry expert group to establish a list of chemicals to be tested and their corresponding concentration limits. The expert group is expected to make its recommendations on additional measures to strengthen quality assurance of bunkers delivered in Singapore. The Chemical Metrology Division from Singapore’s Health Sciences Authority (HSA), the International Council on Combustion Engines (CIMAC) [3] and the International Bunker Industry Association (IBIA) [4], have expressed support for MPA’s efforts to strengthen fuel quality checks and have confirmed their participation in the expert group. In addition, experts from testing laboratories and other relevant bodies will also be involved in the expert group.

MPA, in consultation with Standards Development Organisation [5], will also continue to share relevant information with the ISO, as part of the ISO’s ongoing review of the ISO 8217 standards.

[1] Part of the affected HSFO was sold by Glencore to PetroChina who in turn had supplied to ships in the Port of Singapore.
[2] ISO 8217 - International Standards Petroleum products — Fuels (class F) — Specifications of marine fuels – Table 2.
[3] CIMAC is a leading non-profit Association of the internal combustion machinery industry.
[4] IBIA is a non-governmental organisation for the global bunker industry with members from across the industry value chain in more than 70 countries.
[5] In 2011, Enterprise Singapore appointed the Singapore Chemical Industry Council Limited (SCIC) as a Standards Development Organisation (SDO) to administer the standardisation work of the Chemical Standards Committee (CSC) which supports chemical and related industries.

Related: MPA investigation traces contaminated bunker fuel back to source at Port of Khor Fakkan
RelatedMPA: Glencore and PetroChina supplied contaminated bunkers to about 200 ships in the Port of Singapore

 

Photo credit: Manifold Times
Published: 3 August, 2022

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Research

Sea Cargo Charter report demonstrates shipping’s shortfall against IMO climate goals

2024 report highlights the gap between current emissions and the IMO’s revised strategy for net-zero emissions by 2050.

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Sea Cargo Charter 2024 report

The shipping industry must take urgent action to meet ambitious new climate targets set by the International Maritime Organization (IMO), according to a new report released on Thursday (13 June) from the Sea Cargo Charter (SCC), a global transparency initiative developed by the Global Maritime Forum.

New data from the SCC, a global framework representing 20% of global bulk cargo transport, reveals the sector fell short of minimum international climate goals set by the IMO by an average of 17% in 2023, equivalent to 165 million metric tonnes of CO2e.

When considering ‘striving’ goals set by the IMO, signatories are on average 22% misaligned, which represents a shortfall of 204 million metric tonnes of CO2e in 2023.

Currently, dry bulk, general cargo, and tankers account for around 400 million tonnes of CO2 emissions. With global trade predicted to quadruple by 2050, emissions will skyrocket without urgent action.

Reporting has also been expanded to include “well-to-wake” emissions, which measure emissions from the extraction of oil to its end use, providing a more comprehensive picture of environmental impact and pushing the industry towards faster decarbonisation.

The 2024 report highlights the gap between current emissions and the IMO’s revised strategy for net-zero emissions by 2050. The report shows the importance of commercial and operational decisions on the vessels’ use (such as, instructed speed, cargo and routing optimisation, laden/ballast ratio), innovation and cooperation within the industry to be able to take action in this transition.

Other identified barriers to cutting emissions are geopolitical disruptions, limited alternative marine fuel options for long voyages, and a lack of infrastructure to support new technologies.

The 2024 Annual Disclosure Report was produced by the Global Maritime Forum, which performs secretariat services for the Sea Cargo Charter with expert support provided by UMAS and the Smart Freight Centre.

 

Photo credit: Sea Cargo Charter
Published: 14 June 2024

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Ammonia

Expert discusses technical considerations of using ammonia as marine fuel

Ammonia as bunker fuel poses significant safety challenges due to its toxicity and flammability, says ABS Regional Business Development Manager Muammer Akturk.

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Technical considerations of ammonia as marine fuel

Muammer Akturk, ABS Regional Business Development Manager, on Monday (10 June) published an article on technical considerations of using ammonia as a marine fuel in his Alternative Marine Fuels Newsletter.

The article dives into the use of ammonia as a marine fuel, focusing on the safety and technical considerations necessary for its implementation.

Ammonia is recognised for its potential as a zero-carbon fuel, making it an attractive option for reducing greenhouse gas emissions in the shipping industry. However, it poses significant safety challenges due to its toxicity and flammability.

Key points discussed include:

  1. Safety Measures: The importance of stringent design and operational safety measures to prevent ammonia releases and mitigate risks during both normal and emergency conditions is emphasized. This includes the need for gas dispersion analyses and the use of safety systems like gas detectors and alarms
  2. Regulatory Framework: The article reviews the latest regulations and guidelines developed to ensure the safe use of ammonia as a marine fuel. This includes the IACS Unified Requirement H1, which provides a framework for controlling ammonia releases on vessels
  3. Engineering Considerations: Technical aspects such as fuel storage, handling systems, and the role of risk assessments in identifying potential hazards and implementing preventive measures are detailed
  4. Human Factors: The article also considers the human factors approach to safety, emphasizing training and the importance of designing systems that account for human errorOverall, the article aims to provide a comprehensive overview of the challenges and solutions associated with using ammonia as a marine fuel, highlighting the importance of safety and regulatory compliance in its adoption.

Editor’s note: The full article can be found at the link here.

 

Published: 13 June 2024

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Analysis

JLC China Bunker Market Monthly Report (March 2024)

China’s bonded bunker fuel sales grew in March, as the shipping industry recovered gradually and sellers actively boosted sales on the back of ample supply and high inventories.

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JLC Bonded bunker fuel sales in Zhoushan (Mar 2024)

Beijing-based commodity market information provider JLC Network Technology Co. recently shared its JLC China Bunker monthly report for March 2024 with Manifold Times through an exclusive arrangement:

Bunker Fuel Demand

China’s bonded bunker fuel sales surge in March

China’s bonded bunker fuel sales grew in March, as the shipping industry recovered gradually and sellers actively boosted sales on the back of ample supply and high inventories. Domestic LSFO prices were lower than those in Singapore and other neighboring ports, incentivizing shipowners or operators to refuel their vessels in China, with bunkering volume in Shanghai and Zhoushan rising considerably.

The country sold about 1.82 million mt of bonded bunker fuel in the month, with the daily sales up 13.59% month on month to 58,658 mt, JLC’s data shows.

Sales by Chimbusco, Sinopec (Zhoushan) and China ChangJiang Bunker (Sinopec) came in at 540,000 mt, 630,000 mt and 30,000 mt in March, while those by suppliers with regional bunkering licenses settled at 558,400 mt. At the same time, SinoBunker sold about 60,000 mt of bonded bunker fuel, the data indicates.

China’s bonded bunker fuel exports rise in first two months

China’s bonded bunker fuel exports rose in the first two months of this year, underpinned by fresh quotas and larger production.

The country exported a combination of 3.02 million mt of bonded bunker fuel in January-February, growing by 3.13% from the same months in 2023, JLC estimated, with reference to data from the General Administration of Customs of the PRC (GACC).

Heavy bunker fuel exports totaled about 2.85 million mt in the two months, accounting for 94.13% of the total, while light bunker fuel exports were 177,500 mt, accounting for 5.87%.

The increase in the exports mainly came as China released this year’s first batch of quotas on LSFO exports at the end of 2023. Though refiners’ LSFO production margins were relatively poor, they ramped up their production amid new quotas, which buoyed the exports. China’s LSFO output totaled 2.57 million mt in January-February, with the daily output gaining 2.69% year on year to 42,850 mt, JLC’s data shows.

In January alone, China’s bonded bunker fuel exports settled at 1.78 million mt, jumping by 11.93% month on month and 34.71% year on year.

However, the exports plunged to 1.25 million mt in February, down by 29.99% month on month and 22.75% year on year. Bunkering business at Chinese ports was halted during the Chinese New Year holiday, and customs’ clearing procedure for export was also affected by the holiday. In addition, the operation of many ports was hit hard by heavy snow and freezing rains, adding to the downward pressure on the exports.

 

JLC China bunker exports by region 2023 2024

 

JLC China major blending producers' bunker supply (Mar 2024)

Domestic-trade bunker fuel demand rises in March

Domestic-trade heavy bunker fuel demand recovered mildly in March, as the shipping industry rebounded after the Chinese New Year holiday. However, the demand growth was still limited as some shipowners still suspended services and the market was dominated by wait-and-see sentiment amid high prices.

Domestic-trade heavy bunker fuel demand was estimated at 430,000 mt in the month, a gain of 70,000 mt or 19.44% from a month earlier, JLC’s data shows.

Meanwhile, domestic-trade light bunker fuel demand was estimated at about 140,000 mt, a gain of 20,000 mt or 16.67% from a month earlier, the data indicates.

Bunker Fuel Supply

China’s bonded bunker fuel imports soar in Jan-Feb

China’s bonded bunker fuel imports soared in January-February 2024, due to a low base a year earlier.

The country recorded 581,900 mt of bonded bunker fuel imports in the two months, a surge of 27.36% year on year, with 359,200 mt in January and 222,700 mt in February, JLC estimated, with reference to data from the GACC.

China’s bonded bunker fuel imports dived to a record low in January-February 2023, as bunkering demand had not fully recovered from the epidemic, also because of high freight rates and ample domestic supply. The imports totaled only 456,900 mt in the first two months of 2023, tumbling by 48.01% year on year.

On the other hand, Chinese refiners boosted LSFO production in January-February 2024, limiting the import growth. These refiners produced about 2.57 million mt of LSFO in the two months, with the daily output climbing by 2.69% year on year to 42,850 mt, JLC’s data shows.

Russia became the largest bonded bunker fuel supplier in the first two months of this year, exporting 276,800 mt to China, accounting for 47.57% of the latter’s total imports. Malaysia ranked second with 186,800 mt, accounting for 32.10%, followed by South Korea with 95,800 mt, accounting for 16.46%. Japan climbed to the fourth place with 21,500 mt, occupying 3.69%, while Singapore slipped to the fifth place with only 1,000 mt, making up 0.17%.

In China’s bonded bunker fuel market, only HSFO and MGO are still mainly imported, while LSFO is rarely imported as its import efficiency is relatively low amid steep freight rates.

JLC Bonded bunker fuel imports by source Jan Feb 2024

Domestic-trade bunker fuel supply increases in March

Domestic-trade heavy bunker fuel supply improved in March, as availability of some blendstocks (such as low-sulfur residual oil and shale oil) increased.

Chinese blenders supplied about 460,000 mt of domestic-trade heavy bunker fuel in the month, a rise of 60,000 mt or 15% from February, JLC’s data shows.

Similarly, domestic-trade MGO supply rose to 160,000 mt in March, up 30,000 mt or 23.08% month on month, the data shows. Refineries’ enthusiasm for MGO production improved in March, as domestic MGO prices moved up along with domestic oil products.

JLC Arrival of imported fuel oil cargoes

 

JLC China main oil blending feedstock prices

JLC China domestic trading 180 cSt bunker fuel price 2023 2024

JLC China bunker blending profit by region 2023 2024

Editor
Yvette Luo
+86-020-38834382
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Sales (Beijing)
Tony Tang
+86-10-84428863
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Sales (Singapore)
Ginny Teo
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JLC Network Technology Co., Ltd is recognized as the leading information provider in China. We specialized in providing the transparent, high-value, authoritative market intelligence and professional analysis in commodity market. Our expertise covers oil, gas, coal, chemical, plastic, rubber, fertilizer and metal industry, etc.

JLC China Bunker Fuel Market Monthly Report is published by JLC Network Technology Co., Ltd every month on China bunker market, demand, supply, margin, freight index, forecast and so on. The report provides full-scale & concise insight into China bunker oil market.

All rights reserved. No portion of this publication may be photocopied, reproduced, retransmitted, put into a computer system or otherwise redistributed without prior authorization from JLC.

Related: JLC China Bunker Fuel Market Monthly Report (February 2024)
RelatedJLC China Bunker Market Monthly Report (January 2024)

Note: China-based commodity market information provider JLC Technology has been providing Singapore bunkering publication Manifold Times China bunker volume data since 2020. Data from earlier periods are available here.

 

Photo credit: JLC Network Technology
Published: 11 April 2024

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