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Saturday, 11 January 20
ARE YOU 95% CONFIDENT THAT YOUR VERY LOW SULPHUR FUEL IS ON SPEC AND MARPOL COMPLIANT? - GARD
 KNOWLEDGE TO ELEVATE
Bunker fuel is a commodity and, like all commodities, is produced and sold according to specifications. Bunkers are usually tested by suppliers and purchasers to confirm that the they meet the sale specification. Bunkers may also be tested by Flag State or Port State Control authorities to determine if they meet the MARPOL Annex VI sulphur limits.
For residual fuels, the most widely used specification is ISO 8217 Table 2. The Table 2 specification for sulphur content is stated as per “statutory requirements” and, since 1 January 2020, the global MARPOL sulphur limit is 0.50% with lower limits set for SECAs.
In light of these recent regulatory changes we expect sampling and analysis of very low sulphur fuel oil (VLSFO) to receive greater focus. Given the relative cost of fuel components, we also expect that suppliers will blend fuels to achieve a maximum sulphur content that is close to the statutory maximum. This raises the question of how fuels will be tested by suppliers and purchasers under sale contracts and by authorities to determine MARPOL compliance.
In the accompanying article, Dr. Tim Moss and Dr. Daniel Sheard of Brookes Bell explain analytical statistics including the methodology for assessing test results for fuels under ISO 8217 specifications, including sulphur content. As they explain, a sample tested in different laboratories or tested a number of times in the same laboratory will inevitably produce test results with small degrees of difference. To deal with these variances ISO 8217 refers to ISO 4259 “Petroleum and related products — Precision of measurement methods and results”.
ISO 4259 requires that the supplier must not obtain a test result over the required specification limit value. In contrast, for the recipient a single test result above the specification limit but below the ‘limit plus 0.59R’ means the specification has been met.
In our Insight How analytical statistics lead to standard specifications Dr. Moss and Dr. Sheard of Brookes Bell explain that for the charterer or owner who has purchased the fuel, sulphur content at 0.53% meets the 95% confidence limit. This means that a single test result showing up to 0.53 % sulphur may be considered by the purchaser as acceptable evidence that the ISO 8217 specification has been met.
The supplier on the other hand cannot represent the fuel as compliant unless its own test results show no more than 0.50% sulphur content. For the bunker producer/supplier, the IMO recommends that the blend target should not be the actual sulphur limit, but rather the limit minus an appropriate safety margin. For the bunker producer/supplier to ensure that the product meets the specification limit with 95% confidence, the blend target should be the limit minus 0.59R. This means for the supplier, the target for VLSFO should be .47%. See IMO’s guidance on best practice for fuel oil suppliers for assuring the quality of fuel oil delivered to ships.
Fuel verification procedures for MARPOL Annex VI fuel oil samples
At the MEPC 74 meeting in May 2019, IMO approved amendments to the verification procedures for fuel oil samples drawn in accordance with MARPOL Annex VI. These amendments have not yet entered into force, as they have not been adopted, but to ensure a consistent approach to verifying the sulphur limit, IMO has circulated the amendments for early application by Administrations, see MEPC.1/Circ.882 for details.
With the agreed amendments to MARPOL Annex VI, two new statutory samples will be included – the ‘in-use sample’ and the ‘on board sample’. They are defined as “the sample of fuel oil in use on a ship” and “the sample of fuel oil intended to be used or carried for use on board that ship”. It is intended that these samples will be drawn by Port State Control.
Compared to the existing ‘MARPOL delivered sample’, the sample of fuel oil accompanying the bunker delivery note (BDN) and used to verify the sulphur content of the fuel oil as supplied to a ship, these new samples will be used by Port State Control to verify the sulphur content of the fuel currently in use or to be used by the ship.
In-use and on board samples testing procedure
According to the new verification procedures for ‘in-use’ and ‘on board’ samples, the Reproducibility (R) of the test method, in accordance with ISO 4259-2:2017, should be taken into account when assessing the acceptability of a test result. The relevant MEPC guidelines provide:
“The sample should be deemed to meet the requirements provided the test result from the laboratory does not exceed the specification limit +0.59R (where R is the reproducibility of the test method) and no further testing is necessary.”
This means that in-use and on board samples drawn by Port State Control shall be considered acceptable if the sulphur content test result does not exceed 0.53%. Thus, the verification standards for in-use and on board samples should match the analysis method recommended for application under the sale contract.
MARPOL delivered sample testing procedure
The amended Appendix VI contains a different procedure, however, for testing the MARPOL delivered sample. This sample will be tested without taking the Reproducibility (R) of the test method into consideration. This means that there will be no test margin and thus the test result of a MARPOL delivered sample tested (average of two tests by the same laboratory) must not exceed 0.50% m/m sulphur – in other words, a “hard limit”. A test result above 0.50% will provide Port State Control evidence of non-compliance on the part of the supplier that the fuel as supplied does not meet the sulphur limit and that the BDN is therefore not accurate.
The regulatory limit is 0.50% so does a test result at 0.53% put owners at risk of non-compliance?
The amendments to Appendix VI of MARPOL Annex VI ensures that a 95% confidence limit is applicable to balance the testing variances associated with the testing of in-use and onboard samples and will thus help ensure that ship operators are not unfairly penalised for marginal exceedances in sulphur content due to factors beyond their control.
However, instead of drawing and testing in-use or on board samples, authorities can also choose to test the MARPOL delivered sample. So, if a bunker producer/supplier have blended a fuel without applying a proper safety to control its margin on the sulphur content, in practice there is a chance that a fuel that meets the ISO 8217 specification and MARPOL Annex VI under the sale contract could still be found to be non-compliant when re-tested. Certainly, the vessel owner may be considered to have acted in good faith and in reliance of the 95% confidence limit as long as the initial test result at the point of sale showed 0.53% sulphur or less. There is, however, no guarantee that authorities will take such an approach as the verification procedures and enforcement norms have not been tested.
For purchasers including charterers, if a lab analysis shows over 0.53% sulphur content the fuel should be considered to be off-specification under the sale contract and recourse may be available from the supplier. Clearly, careful vetting of suppliers is of increasing importance in this transitional time as it is only the producers and suppliers that have control over the quality of the product they sell.
Source: Gard
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Saturday, 18 January 20
BIMCO: LOW-SULPHUR FUEL SALE JUMPS TO A 70% SHARE IN SINGAPORE, AS THE IMO 2020 SULPHUR CAP KICKS IN
The final quarter of 2019 marked a massive decline of HSFO sales, as the industry transitioned into compliance of the IMO 2020 Sulphur Cap (IMO2020 ...
Saturday, 18 January 20
GERMAN STEAM COAL IMPORTS IN 2019 PLUMMETED BY 17 % - COAL IMPORTERS ASSOCIATION
Press Release: According to preliminary calculations by the German Coal Importers Association (Verein der Kohlenimporteure e. V.), world trade in h ...
Saturday, 18 January 20
A 61,400 DWT FIXED FROM SOUTH EAST ASIA DELIVERY EAST KALIMANTAN REDELIVERY WEST COAST INDIA IN THE LOW $7,000S - BALTIC BRIEFING
Capesize
The market was relatively stable over this past week putting an end to the past months of more extreme declines. While the Capesize 5T ...
Friday, 17 January 20
EIA ESTIMATES THAT U.S. COAL PRODUCTION DECLINED BY 65 MMST (9%) TO 690 MMST IN 2019. IN 2020, COAL PRODUCTION WILL DECLINE BY A FURTHER 14% TO 597 MMST
U.S. Coal Supply.
EIA estimates that U.S. coal production declined by 65 million short tons (MMst) (9%) to 690 MMst in 2019. In 2020, EIA ...
Friday, 17 January 20
CHINA'S BENCHMARK POWER COAL PRICE EDGES UP - XINHUA
China’s benchmark power coal price rose slightly during the past week.
The Bohai-Rim Steam-Coal Price Index, a gauge of coal p ...
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- Romanian Commodities Exchange
- Toyota Tsusho Corporation, Japan
- Bukit Makmur.PT - Indonesia
- Attock Cement Pakistan Limited
- Dalmia Cement Bharat India
- Meralco Power Generation, Philippines
- Essar Steel Hazira Ltd - India
- Port Waratah Coal Services - Australia
- CNBM International Corporation - China
- Petrochimia International Co. Ltd.- Taiwan
- Kapuas Tunggal Persada - Indonesia
- Mercator Lines Limited - India
- Binh Thuan Hamico - Vietnam
- Energy Development Corp, Philippines
- European Bulk Services B.V. - Netherlands
- Manunggal Multi Energi - Indonesia
- CIMB Investment Bank - Malaysia
- PowerSource Philippines DevCo
- Kumho Petrochemical, South Korea
- Vizag Seaport Private Limited - India
- Ceylon Electricity Board - Sri Lanka
- Rio Tinto Coal - Australia
- Tamil Nadu electricity Board
- Globalindo Alam Lestari - Indonesia
- Savvy Resources Ltd - HongKong
- International Coal Ventures Pvt Ltd - India
- PNOC Exploration Corporation - Philippines
- Karbindo Abesyapradhi - Indoneisa
- Dr Ramakrishna Prasad Power Pvt Ltd - India
- Straits Asia Resources Limited - Singapore
- Latin American Coal - Colombia
- Aboitiz Power Corporation - Philippines
- Central Java Power - Indonesia
- Mintek Dendrill Indonesia
- Wilmar Investment Holdings
- Altura Mining Limited, Indonesia
- Eastern Coal Council - USA
- SMC Global Power, Philippines
- Siam City Cement - Thailand
- Indika Energy - Indonesia
- AsiaOL BioFuels Corp., Philippines
- Kalimantan Lumbung Energi - Indonesia
- Jorong Barutama Greston.PT - Indonesia
- Banpu Public Company Limited - Thailand
- Vedanta Resources Plc - India
- Mercuria Energy - Indonesia
- Economic Council, Georgia
- Indonesian Coal Mining Association
- Filglen & Citicon Mining (HK) Ltd - Hong Kong
- Gujarat Sidhee Cement - India
- Thiess Contractors Indonesia
- Bahari Cakrawala Sebuku - Indonesia
- Bhoruka Overseas - Indonesia
- Vijayanagar Sugar Pvt Ltd - India
- Kobexindo Tractors - Indoneisa
- Karaikal Port Pvt Ltd - India
- Standard Chartered Bank - UAE
- Sinarmas Energy and Mining - Indonesia
- McConnell Dowell - Australia
- Jaiprakash Power Ventures ltd
- Petron Corporation, Philippines
- San Jose City I Power Corp, Philippines
- Wood Mackenzie - Singapore
- Bukit Asam (Persero) Tbk - Indonesia
- TNB Fuel Sdn Bhd - Malaysia
- Bhushan Steel Limited - India
- GMR Energy Limited - India
- Neyveli Lignite Corporation Ltd, - India
- White Energy Company Limited
- Bulk Trading Sa - Switzerland
- Sindya Power Generating Company Private Ltd
- Semirara Mining and Power Corporation, Philippines
- Barasentosa Lestari - Indonesia
- Pendopo Energi Batubara - Indonesia
- Planning Commission, India
- Cigading International Bulk Terminal - Indonesia
- Bhatia International Limited - India
- Kaltim Prima Coal - Indonesia
- The University of Queensland
- New Zealand Coal & Carbon
- Samtan Co., Ltd - South Korea
- Coastal Gujarat Power Limited - India
- Medco Energi Mining Internasional
- Holcim Trading Pte Ltd - Singapore
- Mjunction Services Limited - India
- Minerals Council of Australia
- Aditya Birla Group - India
- Parry Sugars Refinery, India
- SN Aboitiz Power Inc, Philippines
- Baramulti Group, Indonesia
- Iligan Light & Power Inc, Philippines
- Riau Bara Harum - Indonesia
- GN Power Mariveles Coal Plant, Philippines
- Star Paper Mills Limited - India
- Sarangani Energy Corporation, Philippines
- Ministry of Transport, Egypt
- Offshore Bulk Terminal Pte Ltd, Singapore
- PetroVietnam Power Coal Import and Supply Company
- Ind-Barath Power Infra Limited - India
- Thai Mozambique Logistica
- Videocon Industries ltd - India
- Cement Manufacturers Association - India
- ASAPP Information Group - India
- Indogreen Group - Indonesia
- Bank of Tokyo Mitsubishi UFJ Ltd
- Bharathi Cement Corporation - India
- South Luzon Thermal Energy Corporation
- Eastern Energy - Thailand
- Kohat Cement Company Ltd. - Pakistan
- Ambuja Cements Ltd - India
- VISA Power Limited - India
- Global Coal Blending Company Limited - Australia
- Salva Resources Pvt Ltd - India
- MS Steel International - UAE
- India Bulls Power Limited - India
- Singapore Mercantile Exchange
- Semirara Mining Corp, Philippines
- Xindia Steels Limited - India
- Chettinad Cement Corporation Ltd - India
- Indo Tambangraya Megah - Indonesia
- Truba Alam Manunggal Engineering.Tbk - Indonesia
- Anglo American - United Kingdom
- GAC Shipping (India) Pvt Ltd
- Grasim Industreis Ltd - India
- Directorate General of MIneral and Coal - Indonesia
- Uttam Galva Steels Limited - India
- Jindal Steel & Power Ltd - India
- Georgia Ports Authority, United States
- Parliament of New Zealand
- Goldman Sachs - Singapore
- Malabar Cements Ltd - India
- TeaM Sual Corporation - Philippines
- The Treasury - Australian Government
- Indian Energy Exchange, India
- Orica Mining Services - Indonesia
- Carbofer General Trading SA - India
- PTC India Limited - India
- Electricity Generating Authority of Thailand
- GVK Power & Infra Limited - India
- Bukit Baiduri Energy - Indonesia
- Larsen & Toubro Limited - India
- Sojitz Corporation - Japan
- SMG Consultants - Indonesia
- Meenaskhi Energy Private Limited - India
- Interocean Group of Companies - India
- Australian Commodity Traders Exchange
- Agrawal Coal Company - India
- Power Finance Corporation Ltd., India
- Tata Chemicals Ltd - India
- Kepco SPC Power Corporation, Philippines
- Borneo Indobara - Indonesia
- Ministry of Finance - Indonesia
- Heidelberg Cement - Germany
- Central Electricity Authority - India
- Rashtriya Ispat Nigam Limited - India
- Coalindo Energy - Indonesia
- Maheswari Brothers Coal Limited - India
- Siam City Cement PLC, Thailand
- Orica Australia Pty. Ltd.
- Price Waterhouse Coopers - Russia
- Australian Coal Association
- LBH Netherlands Bv - Netherlands
- Trasteel International SA, Italy
- Alfred C Toepfer International GmbH - Germany
- Makarim & Taira - Indonesia
- Metalloyd Limited - United Kingdom
- Posco Energy - South Korea
- Asia Pacific Energy Resources Ventures Inc, Philippines
- Maharashtra Electricity Regulatory Commission - India
- The State Trading Corporation of India Ltd
- Gujarat Electricity Regulatory Commission - India
- Timah Investasi Mineral - Indoneisa
- Independent Power Producers Association of India
- Leighton Contractors Pty Ltd - Australia
- Lanco Infratech Ltd - India
- London Commodity Brokers - England
- Asmin Koalindo Tuhup - Indonesia
- Edison Trading Spa - Italy
- Global Green Power PLC Corporation, Philippines
- Global Business Power Corporation, Philippines
- Marubeni Corporation - India
- Indian Oil Corporation Limited
- Sakthi Sugars Limited - India
- Directorate Of Revenue Intelligence - India
- Coal and Oil Company - UAE
- Chamber of Mines of South Africa
- Antam Resourcindo - Indonesia
- Energy Link Ltd, New Zealand
- Simpson Spence & Young - Indonesia
- IHS Mccloskey Coal Group - USA
- Sical Logistics Limited - India
- Pipit Mutiara Jaya. PT, Indonesia
- Intertek Mineral Services - Indonesia
- Bangladesh Power Developement Board
- Madhucon Powers Ltd - India
- Kideco Jaya Agung - Indonesia
- Bayan Resources Tbk. - Indonesia
- Deloitte Consulting - India
- Renaissance Capital - South Africa
- Merrill Lynch Commodities Europe
- OPG Power Generation Pvt Ltd - India
- Therma Luzon, Inc, Philippines
- Kartika Selabumi Mining - Indonesia
- Ministry of Mines - Canada
- Africa Commodities Group - South Africa
- Miang Besar Coal Terminal - Indonesia
- Formosa Plastics Group - Taiwan
- Commonwealth Bank - Australia
- Oldendorff Carriers - Singapore
- Krishnapatnam Port Company Ltd. - India
- IEA Clean Coal Centre - UK
- Gujarat Mineral Development Corp Ltd - India
- Sree Jayajothi Cements Limited - India
- Dong Bac Coal Mineral Investment Coporation - Vietnam
- Electricity Authority, New Zealand
- ICICI Bank Limited - India
- Billiton Holdings Pty Ltd - Australia
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