Nearly all bunkering vessels in Singapore were fitted with mass flow meters in time to meet the deadline at the beginning of 2017
The introduction of the requirement for bunkering vessels in Singapore to be fitted with mass flow meters (MFMs) by the beginning of 2017 appears to have passed smoothly. A large majority of operational bunkering vessels had MFMs installed by the deadline.
According to the Maritime and Port Authority of Singapore (MPA) which regulates the bunkering industry in Singapore, all but nine of the 144 fuel oil bunkering vessels in Singapore that were required to install MFMs had done so by 1 January 2017. The owners and operators of the nine bunker barges that had not done so are believed to have decided not to fit them due to cost considerations. Those vessels will no longer be licensed to deliver fuel oil to ships in Singapore. The cost of installing an MFM is about S$200,000, plus annual maintenance costs of about S$14,000.
The total number of registered bunkering tankers in Singapore at the end of 2016 was 212, according to MPA, a reduction of about 30 compared with the end of 2015. Bunkering vessels only delivering distillate fuels are not yet required to fit MFMs, but MPA is considering introducing a similar regulation.
As part of the introduction of MFMs the International Bunker Industry Association (IBIA) has developed a new standard operating procedure (SOP) to help bunker surveyors identify their responsibilities when overseeing bunker deliveries involving MFMs in Singapore and develop a harmonised approach for bunker surveyors when dealing with MFM deliveries.
The SOP was designed to work within Singapore’s TR 48 technical standard for MFMs, which became mandatory for deliveries involving MFMs on 1 June 2016. The SOP project was initiated by Rahul Choudhuri, managing director for Asia, the Middle East and Africa at Veritas Petroleum Services, as chairman of the executive committee for IBIA in Asia.
Capt Choudhuri said: “We took up a big challenge in trying to develop this SOP, which would benefit the industry, from scratch. Getting competitors to work together to develop it shows the true value of an independent association like IBIA.”
Douglas Raitt of Lloyd’s Register’s Fuel Oil Bunkering Analysis and Advisory Service (FOBAS), who was also involved in developing the SOP, said: “Surveyors have been apprehensive about the introduction of MFM systems as it has cast doubt on their role in monitoring bunker deliveries, in particular because checking and verifying delivered quantity is typically such an important part of their job. But even with certified MFMs used during bunker deliveries, there is a comprehensive list of checks required where surveyors will be able to offer valuable support to the ship’s chief engineer.
“We believe the SOP demonstrates the continued relevance of surveyors who will be specifically trained and qualified to perform all the relevant checks. If, for example, a seal is broken, compromising the integrity of the MFM system, the presence of a surveyor can help document this and assist the owner in the event of any disputes.”
World Fuel Services Corp welcomed the introduction of MFMs in Singapore. “Using MFMs should be a win-win for the bunker supplier and the buyer. Firstly, MFMs’ greater accuracy ensures that shipowners get exactly the amount of fuel that they paid for and the supplier is not giving away any extra fuel. Secondly, an MFM is much faster and more efficient than using soundings, so it saves time and money for both parties. World Fuel Services applauds MPA’s leadership, and we also welcome the opportunity to work with bunker partners and customers who are interested in using MFMs in other ports around the world.”
Rahul Choudhuri, managing director of fuel testing specialist VPS said to Singapore Solutions: “The impact will be positive. But it must be remembered that MFM is not a plug and play device. This means that operating controls must be in place and checking these parameters by an independent surveyor is a prudent option. The check areas include meter calibration record, zero verification report, totaliser log readings, and system seals integrity.
“Where there is a quantity dispute, the dispute resolution now shifts to a much more sophisticated investigation and analysis of the meter profile or black box. This needs special expertise and is an area that VPS has invested in. We have recently hired a senior instrumentation engineer to join our survey team and provide such independent investigation reports.”
MPA said that at the beginning of January 2017, 51 companies had been issued with bunker survey licences for 2017. It said that the licensing scheme, first introduced in 2014, raises the standards of bunkering survey companies and gives MPA greater regulatory oversight of survey companies and bunker surveyors. From 1 January 2017 all bunker surveying companies must be licensed by MPA.
Darajit Daud, senior manager at bunker survey company SGS Testing & Control Services Singapore, said: “This new licensing scheme for bunker surveying companies complements the existing schemes requiring bunker surveyors to be licensed and requiring bunker survey companies to be accredited to ISO 17020. We believe that together, these schemes will enhance industry confidence in the many bunker surveying companies in Singapore and further help protect the interests of the relevant bunker players in this multi-billion dollar business.”
One impact of the introduction of mandatory MFMs is that the bunker market in Singapore has become more clearly divided into parcel size categories, according to Platts. The parcel size has an impact on the price of bunker fuel for purchasers. The market is now more clearly defined with distinct categories: less than 1,000 tonnes, 1-2,000 tonnes, and more than 2,000 tonnes. According to Platts, although the underlying price of fuel oil bunkers has not changed as a result of introduction of MFMs, the price spread between a bunker fuel delivery of less than 1,000 tonnes can be up to US$4 per tonne higher than for larger parcels.
A trader was quoted as commenting: “With the implementation of MFMs, barging costs are not what it used to be. Margins have come under pressure. So the focus now is on being able to efficiently turn around your barge as many times as you possibly can.”
Bunker sales hit new record
Despite the sluggish nature of global shipping markets bunkering sales in Singapore hit a new record in 2016, rising by 7.7 per cent from 2015 to reach 48.6 million tonnes. This followed a similar rise in 2015 after three years of stagnant sales volumes.
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