Bunker quality deemed poor by 94% of operators

DNV Petroleum Services survey finds operators suffer clogged filters, sludge and pump and piston ring breakages.



Problems with the quality of bunker fuel being delivered to ships is a major concern of ship operators and could increase with greater use of blended low-sulphur fuel to meet new regulatory requirements.



According to a survey by DNV Petroleum Services in Singapore of 96 ship operators worldwide, some 94% reported problems with deliveries in 2010, with off-specification bunkers identified as the biggest problem.



Of the operators affected by off-specification bunkers, about 43% said the problems involved serious quality issues that caused major technical problems on board including clogged filters, sludge and pump and piston ring breakages.



Most fuel quality issues were resolved eventually, often with the assistance of independent fuel testing, but 18% said there was no positive outcome to quality disputes.



Some 14% said that they had to debunker serious off-specification fuels, while 9% used problem fuels after obtaining specialist advice from fuel management companies.



Another 24% secured compensation from bunker suppliers for seriously off-specification fuel. Of those that failed to obtain compensation, some did not have valid samples on board, while others samples were later found to be within specification.



Most operators expected to face similar challenges in bunker supply this year.



The survey also highlighted problems in obtaining low-sulphur fuel, with 40% of those responding to the survey reporting problems in 2010, with another 35% highlighting short deliveries.



However, operators indicated that enforcement of low-sulphur regulations in Europe was becoming more mature, with ship operators gradually adapting to the new requirements. About 64% said there has been an improvement in enforcement by port state control authorities. Those that identified problems said that they mainly related to changing over fuels, availability and disagreements with suppliers regarding regulatory compliance.



A majority of operators said that fuel purchasing decisions were mainly made according to price and emissions.

Energy content and supplier performance were not significant factors in procurement decisions, but fuel performance indicators, such as off-specification records and quantities delivered, were important considerations.



According to DNVPS, the survey highlights the fact that in the next two or three years, regulatory pressure will continue driving up demand for low-sulphur fuel. Meeting this demand will mean that blending activities in the supply chain will also increase and this will lead to a rise in the number of quality issues stemming from use of poor-quality blend components.



DNVPS also warned that if bunker prices stay high, ship operators will need to be more vigilant in checking the quality and quantity of fuel delivered to vessels.



Owners urged to take more control over quality



Shipowners have been caught off guard when switching from one grade of fuel to another.



The results of a DNV Petroleum Services fuel quality survey that show high levels of off-specification bunker deliveries have been questioned by a fuel expert from a competing provider, the Lloyd’s Register fuel analysis service FOBAS .



FOBAS manager and principal engineer Tim Wilson says that while such surveys are useful, there are some immediate questions relating to what kinds of problems the DNVPS customer may have encountered.



He highlighted a number of instances in which shipowners have been caught off guard during periods when they switched from one grade of fuel to another, particularly when the marine pollution rules led to one of the first reductions in sulphur content.



“There are so many ways to look at statistics,” he says. “When we look at fuels, there is a percentage, between 2%-5%, that will be off-spec but it does not mean you cannot use the fuel”.



The percentage of fuel delivered to ships that is totally unusable, or could cause serious long-lasting damage to a ship’s engine, is as little as 0.1%, he suggests.



“But there is always the definition of problems. Were these problems that meant the fuel cannot be used?” he asks. “There are filter problems, but this is what the filter is there to do. The question is whether the crew are managing the fuel safely or whether it is the fuel.”



He says it is as much about onboard fuel management as whether the fuel was delivered according to the specifications.



“But suppliers do need to tighten up on their end too. There are procedures, and we encourage everyone to use the ISO standards. Singapore has done it to great effect.”



While bunker quality standards are suggested, and recently updated, in ISO 8217, there is also a bunker delivery procedure standard, ISO 13739. FOBAS is pushing for these standards to be used across the industry. “Quality needs proper standards, and this will put pressure on suppliers,” says Mr Wilson. “I suggest owners and operators put the ISO standards into their charter clauses.”



The ability for the bunker purchaser to have more control is the idea behind a data analytical tool that DNV Petroleum Services is set to launch later this summer. The web-based service is the result of monitoring and comparing the bunker delivery notes and the tested samples that are sent to the DNVPS laboratories.



The analysis tool gives a comparison of all the suppliers that DNVPS customers use and gives a benchmark to allow purchasers to select suppliers that have a better reported standard.



A purchaser will be able to see how much the measured density or energy value of bunkers supplied by a given supplier, and found through the DNVPS tests, differ from that which the supplier claims in the bunker delivery note.



It is not a fuel specification tool per se — this will still be done by bunker samples being analysed — but that been developed by DNVPS to allow office based purchasers to assess the risks of using a supplier. There will undoubtedly be limitations to the tool. It will only have records of suppliers that DNVPS customers use, which while being a large part of the market, is not a definitive list. It will also require continual updating.



DNVPS business development manager John Stirling says the fact the bunker delivery notes and the supplied samples will continually be compared means data will remain up to date, so the benchmark will always reflect supplier trends.



The DNVPS team took 120,000 samples and has been trialling the tool with some customers over the last six months.



Likely to be known as Fuel Insight, it will have four benchmarks, based on analysis of DNVPS collated data, that purchasers can utilise. A reporting benchmark compares a selected bunker supplier’s bunker delivery note against the laboratory tests, specifically for density, sulphur and viscosity. A statutory benchmark will evaluate a supplier’s record in meeting regulatory requirements, particularly for sulphur and flashpoint. A technical benchmark analyses the technical quality of a supplier’s products by evaluation of critical bunker quality parameters written into ISO8217 and weighted according to their level of importance.



A fourth benchmark, a financial one, scores from 1 to 100 and is similar to another aspect of the analytical tool, the price correction factor. That is the tool that will look at a supplier’s history in providing high-quality bunkers.



It will estimate the corrected bunker prices based on the quoted price and the historical fuel delivery performance of the supplier’s fuel, taking into account density, sediment and the fuel energy.



This tool will calculate a financial loss or gain and an energy loss or gain benchmark for the proposed bunker fuel supplier.



Mr Stirling says the DNVPS customers aware of this analytical tool have welcomed it, and insists the bunker suppliers he has spoken to are also favourable to its ability benchmark suppliers and allow owners to select the best performers.



Source: ShipSuperintendent.com

Bunkering Disputes on 11th May and 12th May

This two-day course has been designed to help you to learn and understand:-

■The technical and contractual basis of fuel quality, specification, quantity and factors relating to its supply to vessels
■What can go wrong and how to improve the chances of avoiding problems, disputes and claims and
■Procedures for controlling risk factors and how to formulate strategies to resolve disputes or defend a claim
The course will cover theory, case studies and an introduction to several tools and techniques including statistical loss control, data audit, risk assessment critical control points and a full review of marine fuel specifications under ISO8217. Case studies covered during the course will require participants to be grouped in teams. Through role-playing, teams will work together towards resolving the problems of the case.


Course Director(s) William Tan, Vice President, Miyabi Industries Pte Ltd

William Tan is a trained Environmental/Public Engineer and has a Masters’ Degree in International Business. Beginning his career as a Project Engineer for a waste treatment company, he progressed to Senior Sales Executive in the Specialty Chemicals Division of a multinational company. In 1994, he joined DNV Petroleum Services, first as Senior Sales Executive and then as Assistant Sales Manager, marketing their Fuel Quality Testing Programs to Japan, Korea, Indonesia and Philippines. During these years, he conducted numerous seminars for the Korean and Japanese shipping community on bunkering matters. William founded Marine Fuel Consultants International Pte Ltd in the year 2000 with a group of marine engineers, fuel consultants and claim specialists, providing services of fuel quality management and claims handling. William’s key expertise lies in the areas of quality and product specification; test parameters and methods; sampling and sample collection procedures; blending calculation and loading procedures; the handling and usage of marine fuels, loss mitigation and loss control management and documentation. From November 2002, William Tan joined Miyabi Industries Pte Ltd as the Vice President. Miyabi Industries Pte Ltd is an Engineering and Consultancy firm specialising in fuel, lubricants and refining processes. The company’s services have been actively sought after by the industry which includes handling of claims to recovery of loses and technical advices.

With Technical Contributions From Ray Hogger and Radius Technical Consulting

Ray Hogger is a graduate chemist from Oxford University and a Chartered Chemist. He is a member of the Royal Society of Chemistry and Member of the Chartered Quality Institute (UK). Ray has extensive experience in quality and technical areas across the chemical sector including oil, gas, chemicals and bio-pharma industries and is a specialist on fuel quality and technical contracting. After a period in pharmaceutical/ chemical manufacturing, he worked with the SGS group, first in their chemical division and then as Quality Manager where he developed a set of corporate quality and TQM/QA programs. He transferred to SGS Singapore, as General Manager for the Petroleum and Petrochemicals Division covering inspection, testing, metrology, environmental and technical services. Following this, he worked with Intertek and Inspectorate in Regional Technical and Business Development Asia and thereafter, as a Consultant, handling legal and insurance cases and providing various technical consultancy services. He was also contracted to PSB Corporation as Principal Consultant for 1 year to develop new business in testing and inspection, particularly in Fuels and Lubes and which included standard and advanced analysis of marine fuels. Although he now works in biofuels supply-trading, Ray provided much of the technical content to this course from his experience in working with the leading inspection and testing organisations in the world.

To find out more, please email info@cconnection.org or http://cconnection.org/Event.php?id=20

Attend Conference Connection's Fuel Oil & Bunker Series Events 2011, Fujairah, Dubai & Singapore

Bitumart Report - June 2, 2010

Conference Connection is pleased to announce the SIXTH ASIAN BITUMEN CONFERENCE 2010 will be held in Singapore on 14-15 October, 2010. Bitumart will be a media partner for the event. Continuing in the tradition of excellence, AsB 2010 (like past Asian Bitumen events) will continue to provide insights into the changing bitumen market picture and the resultant new challenges and opportunities. Since its inception in 2004, this exceptionally timely conference has become the annual meeting place for senior decision makers and key players in the bitumen industry with over 700 delegates from 30 countries having attended the past five events.

Conference Connection warmly invites you to participate in this conference. Do not miss this MUST-ATTEND Conference which provides outstanding networking opportunities and unrivalled worthwhile opportunities to forge business ties!

Registration Now Open!
• Take advantage of our Special Exclusive Discount! Register and pay by 31 May 2010 and enjoy US$500 off the regular fee
• If you have registered for Middle East Bitumen 2010 at the same time, you get a further US$200 discount or a total savings of US$700 and pay only US$1295 per person! Send in the reply coupon below and register NOW!

For registrations & enquiries, Tel: (65) 6338 0064 Fax: (65) 633804090 Email: info@cconnection.org

18th Annual Middle East Petroleum & Gas Conference Summary

The 18th Annual Middle East Petroleum & Gas Conference (MPGC), organised by The Conference Connection Inc, was successfully held in Kuwait on April 25-27 despite the travel disruption caused by volcanic ash.

MPGC 2010 marked the first occasion that MPGC was held in Kuwait and the event enjoyed the unprecedented political and industry support, with Kuwait Petroleum Corporation as host and with the gracious patronage and official opening by His Excellency Sheikh Ahmad Al-Abdallah Al-Ahmad Al-Sabah, Minister of Oil & Minister of Information, Kuwait. Amongst the other “K Group” companies that supported MPGC 2010, include the Kuwait National Petroleum Company, Kuwait Oil Company, Kuwait Petroleum International and Kuwait Gulf Oil Company, who participated as speakers and delegates giving the conference significant coverage of a wide spectrum of information on Kuwait’s oil and gas industries and a wide berth of Kuwaiti attendance in the audience which was a milestone in the 18 year history of MPGC.

The opening session for MPGC 2010 on Monday April 26 had a stellar cast of Mr. Saad A. Al-Shuwaib, Chief Executive Officer of KPC and Dr Fereidun Fesharaki , Chairman of FACTS Global Energy co-charing and with His Excellency Sheikh Ahmad Al-Abdallah Al-Ahmad Al-Sabah, and two top names in the global oil business as keynote speakers namely Mr Christophe de Margerie, Chief Executive Officer of TOTAL and Mr. Malcolm Brinded, Executive Director, Upstream International of Royal Dutch Shell, engaging in lively debate and discussion on Kuwait’s oil production capacity, the shortage of gas supply despite the Middle East sitting on 40% of the world’s gas reserves and how the latest round of US sanctions on Iran would affect existing supplies and suppliers.

Click here to read the press coverage

MPGC 2010 Highlights

• Nearly 350 delegates from more than 30 countries worldwide, attended the 18th annual MPGC.
• Over 30 presentations were featured on the MPGC agenda based on the theme: Oil Demand Recovery & Price Volatility: Growth Outlook in a Carbon Constrained World
• Keynote Addresses were delivered by Mr. Christophe de Margerie on “Post-crisis Trends for Oil Demand & Supply” and by Mr. Malcolm Brinded on “Natural Gas: Changing the Middle East Energy Landscape”
  
• The IEA and OPEC were represented by Dr. Hasan M. Qabazard, Director of Research Division on “Global Oil Outlook & Challenge” as well as from IEA by Ambassador Richard Jones, Deputy Executive Director on “The Future of Hydrocarbon – Down but Not Out”
  
• The “who’s who” of Kuwaiti oil & gas companies made the difference in presenting the opportunities and challenges of the domestic markets as well as KPC’s role as a global player in all aspects of industry.
  
• Delegate response once again rated premium networking opportunities and industry-tailored programme as their keys reasons for attending, making MPGC a key vehicle for industry interaction on an annual basis
• Sponsors supporting the 2010 event included Shell as Platinum sponsors with co-sponsors Bank of America Merrill Lynch, Deloitte & Touche, Dubai Mercantile Exchange, ExxonMobil, PricewaterhouseCoopers, TOTAL, and Vitol. These companies provided the conference with a strong delegate base of senior executives and synergistic client relationships.

Inside MPGC 2010! Click here to view photograph of events MPGC is held in conjunction with the Annual Middle East Petroleum & Gas Week (MEOW). A series of two-day events on specialised subjects will be held during the week with MPGC as the anchor event. MEOW events have been developed to cater to specialised information needs of delegates, and to optimise their time. Nearly 550 participants from 50 countries have attended MEOW 2010 events, which comprised:

• The 15th Annual Middle East Petroleum Insiders, a two-Day Executive Briefing, April 24-25 2010, presented by leading global oil consultants from FACTS Global Energy
• Production Sharing Contracts & International Petroleum Fiscal Systems, a two-day best selling upstream course, April 24-25 2010, presented by The Conference Connection Inc and Daniel Johnston, President, Daniel Johnston & Company
• Fuels Blending Technology and Economics, a two-day course, April 24-25 2010, presented by Ara Barsamian, President Refinery Automation Institute
• The Oil Products Forum: The Middle East, a two-day multi speaker conference, April 28-29 2010, organised, produced and managed by The Conference Connection Inc
• Commercial Impact of Competition & Anti-Trust Laws for the Oil & Gas Markets, a two-day specialised course, April 28-29 2010, presented by The Conference Connection Inc and Michael Jurgen Werner, Norton Rose Group
• Middle East Gas Insiders, a one -day strategy briefing, April 28 2010, presented by leading global gas consultants from FACTS Global Energy

We would like to acknowledge with thanks the special role of the MPGC 2010 International Advisory Committee who provided invaluable support and input for key issues of discussion on the agenda and access to speakers and chairs invited and for their excellent contribution on-site in moderating sessions.

We look forward to seeing you at the 19th Annual Middle East Petroleum & Gas Conference in 2011!

Should you be interested in presenting a paper, being a sponsor or exhibitor or simply attending, contact us at mpgc@cconnection.org.

1st Middle East Oil Products Forum 2010 Summary

The inaugural Oil Products Forum (OPF 2010) was held on 28 - 29 April 2007 at the J W Marriott, Kuwait City. The conference was hosted by Kuwait Petroleum Corporation (KPC), organized by The Conference Connection Inc., under the Patronage of His Highness Ahmad Al-Abdallah Al- Ahmad Al-Sabah, Minister of Oil & Minister of Information, Kuwait.

Held in conjunction with the 18th Middle East Oil & Gas Week (MEOW 2010), 24 – 29 April 2010, which features the flagship event, The 18th Annual Middle East Petroleum & Gas Conference (MPGC 2010) from 25 – 27 April 2010, OPF 2010 continued the trend of product focused events that have been organized by Conference Connection during the MEOW weeks. The product spread for past events has included Gasoline & Diesel, Lubes, Condensate, LPG, Jet fuel and others.

The two-day conference brought together industry senior executives and market specialists to discuss market realities and future trends in petroleum products with specific focus on key supply, demand, storage, and pricing issues covering Diesel, Gasoline, Fuel Oil and Middle Distillates, and the challenges faced by the product markets from new developments like Bio Fuels.

Participating countries at OPF 2010 included India, Kuwait, Qatar, Saudi Arabia, Singapore, Thailand, The Netherlands, UAE, UK & USA. Leading buyers, sellers and specialists from product markets, as well as policy makers and regulators for fuel mix, alternate and clean fuels attended the event. Representatives from supporting organizations specializing in storage, transportation and financing of fuels and technical experts and corporate planners were also present. The strongest reasons cited by the delegates for attending the event were networking opportunities and program content.

Mr. Mark Lewis, Managing Director, Energy Market Consultants, UK, chaired the event. Highlight of the conference was an in depth discussion on Fuel Oil and the challenges faced by the stakeholders from the changes in Sulphur specifications and European regulations. Special aspects of the Kuwaiti market were also addressed by a country presentation on Kuwait and a paper by KPC on Market challenges in Middle Distillates. The event also gave delegates a unique insight into short and medium term perspectives on product markets from the Atlantic basin and East of Suez.

For further queries and a full list of courses, conferences and other information, please contact info@cconnection.org or visit www.cconnection.org.

18th Annual Middle East Petroleum & Gas Conference

Global Supermajor Heads to Address MPGC 2010 in Kuwait

Christophe de Margerie, Chief Executive Officer, Total, France, Malcolm Brinded, Executive Director of Upstream International, Shell International B.V, Ray Hunt, Chairman & CEO, Hunt Oil Company and Dr Michael Daly, President Exploration and Access, BP plc, are amongst senior oil company chiefs expected to address the three-day 18th Annual Middle East Petroleum & Gas Conference (MPGC 2010), being held in Kuwait from April 25-27 2010. MPGC 2010 which is popularly known as the longest annual oil conference in the Middle East, is being held as part of Middle East Petroleum and Gas Week events with various networking functions, events, briefings, and conferences planned.

His Excellency Ahmad Al-Abdallah Al-Ahmad Al-Sabah, Minister of Oil & Minister of
Information, Kuwait, will extend his Patronage and open the three-day event and chair a Ministerial Panel with other Oil Ministers from the Gulf. This panel is expected to be followed by Keynote Address from Mr de Margerie and Mr Brinded.

MPGC which is widely acclaimed for facilitating high-quality information exchange, intellectual debate and outstanding networking opportunities, has been held annually in the Gulf since 1993, with national oil companies in the region vying to host the event. Now in its 18th year, MPGC 2010 will be held in Kuwait for the 1st time in its 18 year history, with Kuwait Petroleum Corporation as hosts.

MPGC 2010 is the flagship event of Middle East Petroleum & Gas Week, which will run from April 24 -29 and boasts seven back to back events covering the upstream, downstream, gas and product sectors of the global oil markets. The week is expected to be attended by 650 delegates from over 50 countries with over 350 expected at MPGC 2010 alone. This will include oil industry leaders, visionaries, senior decision makers and government officials to debate and discuss issues based on the theme, “Oil Demand Recovery & Price Volatility: Growth Outlook in a Carbon Constrained World.”

Dr. Fereidun Fesharaki, Chairman of FACTS Global Energy, leading oil industry advisors for the Middle East and Asia, who will co-chair MPGC 2010 said, per MPGC 2010 theme, “The discussions will cover demand/supply patterns resulting from demand recovery and ongoing price volatility as global oil markets move towards a carbon constrained world. Amidst the uncertainty of the timing for full economic recovery, discussion will cover OPEC’s market balancing production policies, nonconventional oil production, the vast potential of upstream opportunities in Iraq, changes in the balances of market crudes and crude pricing trends with the strengthening of Middle East sour crudes and widening sweet-sour differentials. With the important development of Kuwait joining the ranks of LNG importers, MPGC 2010 provides unique opportunity to focus on the Kuwaiti oil and gas industry and an excellent forum for an open and frank discussion of all these key issues on the future of the global oil markets.”

MPGC is recognised for the seniority and profile of key decision makers as attendees, including senior management from national oil companies, the oil majors, trading groups and independents, policy makers and financial institutions, from over 50 countries. In addition, nearly 80 oil industry experts, who participate as speakers, chairmen and course leaders are expected to attend both MPGC and the other Middle East Petroleum and Gas Week events. Banks, financial institutions and professional advisors are also expected to take a high profile at MPGC.

MPGC and the Middle East Petroleum & Gas Week 2010 events are being organised by The Conference Connection Inc and hosted by Kuwait Petroleum Corporation who will also host the gala conference dinner on April 26 2010. MPGC enjoys outstanding energy industry support via sponsorship from key organisations including, BP, Shell, Total, Dubai Mercantile Exchange, ExxonMobil and Vitol, with Oil and Gas Journal as official publication.

______________________________________________________________________________________
ISSUED BY: THE MEOW 2010 SECRETARIAT, 135 MIDDLE ROAD, #05-01 BYLANDS BUILDING, SINGAPORE 188975.

FOR ENQUIRIES IN SINGAPORE TEL 65 6338 0064, FAX: 65 6338 4090, OR EMAIL: mpgc@cconnection.org
FOR ENQUIRIES IN KUWAIT: MOHAMMED AL SHATTI, MANAGER OF CEO’S OFFICE TEL 965 2499 4025,
FAX: 965 2499 3513, OR EMAIL: MKS@KPC.COM.KW