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West P&I: How to limit your exposure to fuel contamination

Making sure crew members that handle bunker fuels have the right training is vital to reducing the risk of contamination, said Capt. Simon Hodgkinson, Head of Loss Prevention.

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The following article on steps shipowners and operators can take in preventing fuel contamination issues was written by Capt. Simon Hodgkinson, Head of Loss Prevention at mutual marine insurer West P&I; it was recently shared with Singapore bunker publication Manifold Times:

Fuel contamination remains a huge financial and operational risk for shipowners and operators, as the Singapore incident from earlier this year shows. In April, around 200 vessels visiting the port experienced technical issues such as blackouts and problems with or damage to the fuel pump or engine, forcing some to debunker. 

An investigation by the Singapore Maritime and Port Authority has since attributed the contamination to a batch of high sulphur fuel oil with high concentration levels of chlorinated organic compounds. 

At the time of writing, it is too early to determine how much the incident, involving US$120 million worth of affected fuel, will cost shipowners and operators. But with vessels experiencing operational problems – causing major delays to cargo delivery – insurance claims could reach millions of dollars and take several years to resolve. 

With marine fuel easily the biggest operating cost for shipping companies, they cannot afford to make mistakes. Fortunately, there are measures available to them to limit the risks of a widespread fuel contamination. 

Testing can be a crucial tool  

Buying good quality fuel from a reputable source is one top line way to reduce risk, although a supplier’s reputation is no guarantee that all fuel will always meet specification. Yet suppliers with exemplary reputations usually charge more – and it can be difficult to understand the relative reputations of suppliers in a port that a shipowner is not familiar with. The high price of fuel oil could understandably prompt some shipowners to go for cheaper, lower-pedigree alternatives. 

The risk is that operators get what they pay for when choosing a more affordable option – low-grade or even contaminated fuel that will cost them dear in disruption, delays or damage to the vessel. Owners and operators can be forgiven for buying at the lower end of the market to minimise their outgoings when oil prices are so high, but there are ways to cut risks.  

For companies willing to pay more, finding the best product is fairly straightforward. Fuel testing specialists have records on all suppliers around the globe, including data on the quality of their fuel, giving buyers confidence in what they purchase. Continuously updated port-specific fuel standards and compliance data can be obtained by shipowners, and is provided alongside bunker quality alerts to all West members on the Club’s Neptune platform. Guidance on buying quality fuel is also available in this International Maritime Organization document.

Another safeguard for shipping companies is to get the fuel tested by a specialist, which will likely reveal any potential issues or anomalies. If there are concerns, the shipowner or operator should then have a gas chromatography-mass spectrometry (GCMS) test to check for traces of volatile organic contaminants; the most common being chlorinated solvents, phenols and styrene.    

Testing fuel may be an obvious approach, but getting it done within the parameters of the bunker supplier contract is often tricky. Unsurprisingly, the contract is usually heavily weighted in favour of the supplier, with time bar clauses limiting the period for when a shipping company can make a claim. 

Contractual issues 

The set period in the BIMCO Bunker Terms 2018 is 30 days for concerns around fuel quality and 14 days for issues related to quantity. But in some instances, suppliers set very short time limits, possibly seven days or less, within the contract. That period may have already elapsed by the time the shipowner has sent samples off for testing, received the results and then started burning the fuel – after which time it is too late to make a claim. A claim against a fuel supplier is limited by the total cost of supplied fuel and may not cover all potential losses.    

Other contractual issues to be aware of include a financial cap on liability and the quality determination clause, where the shipowner has to respond within a short time to a supplier’s request for joint testing. Failure to do so means the owner must accept the results of the test, even if it was conducted in their absence. 

The circumstances for making a claim change when there is a time-charter in place. In that situation, the charterer is obliged to supply a reasonably well-maintained vessel with fuel that is fit for consumption. At the very least, the fuel should comply with ISO 8217, the global standard for marine fuels used in shipping. But even if it does pass routine inspection, the fuel may contain contaminants that remain undetected without GCMS testing – putting the charterer in breach of the fit for consumption clause.

Should a breach occur, leading to engine problems, the shipowner can pass liability to the charterer, requiring them to debunker and to provide compensation for any physical or financial losses. The key thing here is for the owner to have evidence proving contamination or that the fuel has already caused damage.   

Building crew awareness 

Making sure crew members that handle bunker fuels have the right training is vital to reducing the risk of contamination. Seafarers must understand the basic components and functionality of marine fuel systems and standards. They should also be well versed in the impact of marine fuels on machinery, oil analysis reports and identifying potential problems. Experienced mariners will be able to monitor the vessel’s separators and fuel consumption when fresh fuel is burning, enabling them to spot any issues as early as possible. 

Well-trained seafarers will also know that isolating new fuel in separate tanks until the samples have been tested is critical. Not isolating the new fuel leaves the shipowner in a weak position when making a claim, as combining fuels could be the source of the contamination – something that they may be unable to dispute in a legal claim. Even for off-spec problems, using additives or blending fuels to bring it back on-spec can invalidate the supplier’s contract. 

Bunkering remains an essential, but challenging, practice for shipowners and charterers who will likely face a huge bill if things go wrong. For more advice on how to limit the risks of fuel contamination, West P&I’s Loss Prevention team can provide expert guidance. 

 

Photo credit: CHUTTERSNAP from Unsplash
Published: 25 July, 2022

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Business

Notice of intended dividend issued for defunct bunkering firm Coastal Oil Singapore

Company’s former Chief Finance Officer received a nine-year jail sentence in 2021 after pleading guilty to 15 charges for conspiring with others to defraud eight banks into approving USD 320 million in loans.

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RESIZED Coastal Oil Singapore Pte Ltd

A notice was published in the Government Gazette on Wednesday (16 April), regarding the second and final intended dividend to creditors of defunct bunkering firm Coastal Oil Singapore Pte Ltd.

The following are details of the notice of intended dividend of the company:

Name of Company : Coastal Oil Singapore Pte. Ltd. (In Creditors’ Voluntary Liquidation)
Unique Entity No. / Registration No. : 200413975N
Address of Registered Office : 1 Raffles Quay, #27-10, South Tower, Singapore 048583
Last Day of Receiving Proofs : 30 April 2025
Name of Liquidator : Yit Chee Wah
Address : c/o FTI Consulting (Singapore) Pte. Ltd.,1 Raffles Quay,#27-10, South Tower, Singapore 048583

In 2021, the former Chief Finance Officer of Coastal Oil Singapore received a nine-year jail sentence at the State Courts of Singapore.

Ong Ah Huat earlier pleaded guilty to 15 charges; the charges include three counts of engaging in a scheme to defraud and nine counts of forgery for conspiring with accomplices to defraud eight banks into approving USD 320 million in loans.

The banks involved were: China Merchants Bank (Singapore), Bank of Communications (Hong Kong), BNP Paribas (Hong Kong), Cooperative Rabobank (Hong Kong), DBS Bank (Hong Kong), HSBC (Hong Kong), OCBC (Hong Kong), and Standard Chartered Bank (Hong Kong).

In 2019, Manifold Times reported Hong Kong-listed COSCO SHIPPING International (Hong Kong) Co., Ltd stating its indirect wholly-owned bunkering subsidiary Sinfeng suspecting fraud to be involved in the liquidation of Coastal Oil Singapore during December 2018.

It was believed Coastal Oil Singapore owed approximately US $357 million to 79 firms. Out of the total USD 357 million, banks were the hardest hit taking up about US $354 million, or 99.1%, of total credit owed.

A complete coverage of the events leading to the current development has been arranged by Singapore bunker publication Manifold Times (in descending date order) below: 

Related: Former CFO of defunct bunkering firm Coastal Oil Singapore receives nine-year jail sentence
Related: Former Coastal Oil CFO admits to defrauding eight banks of USD 320 million in loans
Related: Singapore: Former Coastal Oil employees face forgery charges over fake sales contracts
Related: Coastal Oil hearings progress, court grants liquidators access to Sinfeng documents
Related: China Merchants Bank legal suit with Sinfeng over alleged $13 million debt progresses
Related: Fraud suspected in Coastal Oil Singapore case, says COSCO
Related: Coastal Logistics owned “Atalanta”, “Babylon” to undergo auction
Related: Singapore: Bunker tanker “Coastal Mercury” arrested
Related: Heng Tong Fuels & Shipping in court over DBS Bank bunker tanker loan
Related: Coastal Logistics owned MR tanker “Babylon” arrested
Related: Fraud suspected in Coastal Oil Singapore case, says COSCO
Related: Coastal Oil Singapore: Creditor list surfaces in bunker market
Related: Singapore: Bunker tanker “Coastal Neptune” arrested
Related: Coastal Oil Singapore creditors meeting scheduled on 10 Jan
Related: Coastal Oil Singapore in US $380 million debt to at least 10 banks
Related: Singapore: Coastal Logistics owned MR tanker “Atalanta” arrested
Related: Heng Tong Fuels & Shipping, Coastal Logistics tankers enter S&P market
Related: Coastal Oil Singapore to hold creditors meeting on 28 Dec
Related: Breaking news: Coastal Oil Singapore under liquidation

 

Photo credit: Benjamin-child
Published: 17 April, 2025

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Financial Result

CBL International reports net loss of USD 3.87 million for FY 2024

Despite the net loss, CBL reports a 35.9% revenue increase, which was primarily driven by a 38.1% increase in sales volume, supported by the addition of new customers during the year and more.

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CBL International Limited (CBL), the listing vehicle of Banle Group, a leading marine fuel logistic company in the Asia-Pacific region, on Thursday (17 April) announced its annual financial results for the year ended 31 December 2024.

The company reported a consolidated revenue of USD 592.52 million for the year, marking a 35.9% increase from USD 435.90 million in 2023. 

This growth was primarily driven by a 38.1% increase in sales volume, supported by the addition of new customers during the year, expansion of its supply network to cover more ports, and a broader customer base that now includes bulk carriers and oil and gas tankers in addition to container liner operators.

However, due to challenging market conditions, CBL reported a net loss of USD 3.87 million in 2024, compared to a net income of USD 1.13 million in 2023. 

This was mainly attributed to a 25.5% decrease in gross profit to USD 5.37 million in 2024 from USD 7.21 million in 2023 and a 56.8% rise in operating expenses to USD 8.70 million in 2024 from USD 5.55 million in 2023. 

The company adopted a volume-driven growth strategy that involved offering more competitive pricing in a market characterised by intensified competition and pricing pressure. 

“While this approach supported increased sales volume and market share, it also contributed to narrower profit margins,” it said. 

In addition to reduced gross margins, the net loss was impacted by increased expenses for business expansion, biofuel operation, additional expenses to enhance ESG, and a rise in interest expenses. These were partially offset by a reduction in income tax expenses. 

The financial outcome reflects both the dynamic nature of the bunkering industry and the company’s ongoing investment in client base development and geographic growth, which are expected to enhance long-term positioning as market conditions normalise.

Earnings per share (EPS) reflected this, decreasing to USD (0.136) in 2024 from USD 0.045 in 2023. Cash and cash equivalents increased by 8.3% to USD 8.02 million as of December 31, 2024 from USD 7.40 million as of December 31, 2023.

Business Expansion in Challenging Times

CBL International’s operational expansion was a key focus in 2024, particularly in a challenging industry environment marked by geopolitical tensions, such as the Red Sea crisis and broader Middle East tensions. The company grew its service network from 36 ports at the time of its IPO in March 2023 to over 60 ports by year-end 2024, covering Asia Pacific, Europe, Africa, and Central America. Revenue growth year-on-year was notable across China, Hong Kong, Malaysia, Singapore, and South Korea.

Key new ports included Mauritius, Panama, and India, enhancing its global reach. This expansion was supported by servicing nine of the world’s top 12 container shipping lines, representing nearly 60% of global container fleet capacity. The Company’s European expansion focused on strengthening cross-regional service offerings for Euro–Asia trade routes. Growth was supported by a stronger presence in the Amsterdam-Rotterdam-Antwerp (ARA) region and a new Ireland office established in late 2023, enhancing local sourcing capabilities.

Customer diversification was another priority, with the share of non-container liners in total revenue increased, and sales concentration among the top five customers declined in fiscal year 2024.

A significant highlight was the company’s push towards sustainability, with biofuel sales surging by 628.8% and volume by 603.0%. The introduction of B24 biofuel (76% fossil fuel, 24% used cooking oil methyl ester) in Hong Kong, China, and Malaysia reduced greenhouse gas emissions by 20%, supported by ISCC EU and ISCC Plus certifications secured in 2023. This aligns with global trends towards greener shipping solutions and positions CBL as a leader in sustainable fuel logistics.

Strategically, CBL enhanced its IT systems, implementing real-time order tracking, data analytics, and workflow automation to improve efficiency. Credit risk management was strengthened, and working capital management improved with increased factoring facilities and a cash balance rise, navigating macroeconomic challenges through pricing strategies and port network adjustments. Additionally, CBL expanded its funding sources by accessing capital markets, such as private placement, increasing financial flexibility to support growth initiatives.

CBL’s Outlook for the Future

Despite the net loss, CBL’s management remains optimistic about the future, viewing current industry challenges as an opportunity to build resilience and enhance customer loyalty. 

While prudently evaluating the impact of the latest US tariff policy, among other macro incidents such as geopolitical tensions, regulatory changes, and shifting global trade dynamics, on the economy and the bunkering sector, CBL believes its broad global network, primarily focused on intra-Asia and Euro-Asia trade routes, helps mitigate potential adverse effects. Since the company has no operation on U.S. ports, the impact of such policies may be limited in the near future.

The company’s strategic expansion of ports, diversification of its client base, and commitment to sustainable initiatives are designed to position it for growth when market conditions improve.

By investing in new ports and expanding relationships with key industry players, CBL aims to secure long-term partnerships that will strengthen its market position as global trade stabilises and profitability improves.

Dr. Teck Lim Chia, Chairman and CEO of CBL International Limited, stated, “We are confident in our strategy to expand our service network, maximise sales volume and explore sustainable offerings, even in these challenging times.”

“Our investments in new ports, diversified clients, and sustainable fuels are building a foundation for future growth. We believe that by demonstrating our capabilities at present, we will earn customer loyalty that will yield substantial benefits as the market recovers, positioning CBL International for significant success in the years ahead.”

Looking ahead, CBL remains focused on expanding its market presence, particularly in biofuels, and enhancing its global supply network. 

 

Photo credit: Kyle Sudu on Unsplash
Published: 17 April, 2025

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Newbuilding

Chinese shipbuilder delivers CMA CGM’s Singapore-flagged LNG-powered boxship

CMA CGM welcomes “CMA CGM SEINE”, the first in a four-ship series of 24,000 TEU LNG dual-fuel container ships, by Hudong-Zhonghua Shipbuilding, according to BV Marine & Offshore.

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Chinese shipbuilder delivers CMA CGM’s Singapore-flagged LNG-powered boxship

Bureau Veritas Marine & Offshore (BV) on Wednesday (16 April) announced the successful delivery of CMA CGM SEINE, a new 24,000 TEU LNG dual-fuel container ship, by Hudong-Zhonghua Shipbuilding (HZSY). 

This milestone marked the completion of the first vessel in a four-ship series, with BV providing classification and BV Solutions Marine & Offshore (BVS) providing advisory services. 

It is CMA CGM’s first LNG-powered vessel flying the Singaporean flag with a capacity of 24,000 TEU. 

It was reported that CMA CGM planned to expand its fleet and vessel tonnage, adding more vessels under the Singapore Registry of Ships. To support the transition to more sustainable fuels, CMA CGM said it would register and bunker alternative fuel vessels under the Singapore flag.

Xavier Leclercq, Vice President of CMA Ships, said: “Today’s delivery of the ‘CMA CGM SEINE’ featuring LNG as fuel at such a large scale, will remain a major landmark in the shipping world and embodies the engagement of the CMA CGM group toward an ambitious decarbonisation path, leading the way to our industry.”

Mr. Xiufeng ZHANG, Vice General Manger of Hudong-Zhonghua shipyard, said: “CMA CGM SEINE, as the lead ship of the four 24,000-TEU LNG dual-fuel powered container ships ordered by CMA Ships from our company, stands as a new-generation maritime ‘Green Giant’ and ‘super cargo hauler’.”

The vessel integrates a dual-fuel propulsion system supported by GTT Mark III membrane-type LNG bunker tanks, with a total capacity of 18,600 cubic meters, designed to enhance both environmental performance and operational efficiency.

Measuring 399.9 meters in length and 61.3 meters in beam, the vessel has a carrying capacity of 23,876 TEU and is equipped with a WinGD W12X92DF-2.0 dual-fuel main engine, incorporating the Intelligent Control by Exhaust Recycling (iCER) system. 

This configuration significantly reduces methane emissions and enables compliance with IMO Tier III emission standards when operating in "Diesel + iCER mode". 

BV worked closely with the engine manufacturer and the shipyard to test the parent engine and issued the Engine International Air Pollution Prevention (EIAPP) certificate, establishing a foundation for compliance across the series. The iCER system optimises energy efficiency, achieving an Energy Efficiency Design Index (EEDI) reduction well beyond the IMO’s Tier III standards.

To address the critical sloshing challenges in large-volume LNG bunker tanks, BVS performed direct computational fluid dynamics (CFD) simulations. The verified pressure data was provided to the design unit for structural strength checks, ensuring the safety of the cargo containment system and hull support structure.

The vessel features advanced technologies to boost operational performance and energy efficiency. Equipped with the SmartEye intelligent monitoring system and the TotalCommand full-control system, it achieves automated precision control during berthing, significantly reducing berthing time and enhancing port operations. 

Energy efficiency is further improved by applying variable frequency drive (VFD) technology to the engine room fans and seawater cooling pumps. Meanwhile, the WinGD Data Collection Monitoring (DCM) system offers real-time tracking and analysis for the dual-fuel main engine, supporting operational optimisation. 

BV also supported the upgrade of BV certified boil-off gas (BOG) compressors by conducting sea trial tests and re-issuing product certificates, facilitating seamless system commissioning and vessel delivery.

Related: CMA CGM to participate in bunkering trials of alternative fuels in Singapore

 

Photo credit: Bureau Veritas Marine & Offshore
Published: 17 April, 2025

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