Vopak Terminals Singapore and Stolthaven Singapore’s recent moves to offer concurrent bunkering services at its terminals have been hailed as a solution to ease congestion at Singapore’s anchorages, one of the busiest in the world. However, there are still many logistical and safety aspects to overcome before the service becomes an industry practice in Singapore, trade sources told S&P Global Platts recently.
Singapore is the world’s largest bunkering port. In 2017, bunker sales volumes at the city-port rose 4.2% year on year to a record 50.6 million mt. Annual vessel arrival tonnage increased 5.1% over the same period to 2.8 billion gross tons.
Singapore’s waterways are also one of the busiest in the world, with around 3,400 vessels arriving at the city-port each month to take bunkers. The maritime industry contributes 7% to Singapore’s GDP and employs over 170,000 people.
With cargo operations a priority at terminals, there is a possibility that the vessel crew would have to split its attention between two concurrent operations, and could end up being distracted from either, or both operations, sources said.
“If there is an oil spill from a collision of vessels or a chemical disaster, the terminal will be responsible for the clean-up,” Trinity Shipping Agency’s managing director Herbert John said. “That’s a huge risk and cost for the terminal operator to bear.”
It’s a consequence which Universal Terminal, a major independent petroleum terminal in Singapore, is all too aware of.
“While the terminal operator may prescribe the highest safety ordinances to be adhered to, we are not in a position to warrant that the bunker supplier, bunker barge and receiving vessel will all comply with any such safety ordinances. We are also not in a position to vet the safety standards of each and every bunker barge which could come alongside vessels berthed at our terminal,” a Universal Terminal spokesman said.
He added that in the event of an oil spill, the Maritime and Port Authority of Singapore and the respective P&I Club and other authorities will detain the vessel for investigation, which means that the affected jetty or jetties cannot be used for a period of time.
“The use of our jetties is our primary source of income. Depriving us of the use of any of our jetties could therefore have significant economic consequences, in addition to the actual cost of containing the spill,” the spokesman said.
RISK OF QUANTITY DISPUTE
Bunker surveyors, shipping agents and some bunker suppliers said there was also a possibility of quantity disputes if bunkering is carried out along with fuel oil cargo operations.
“There is a risk of loss of fuel when you’re loading or discharging [fuel oil] cargo which belongs to the charterer; and receiving bunker fuel which belongs to the owner,” Potential Inspection Services’ managing director Daniel Phua said.
“While the cargo tank and the bunker tank of the receiving vessel is separate, how do you know there is no connecting valve or hose from the cargo tank to bunker tank?” he questioned.
He added it was hard to apportion liability if the variance in the fuel quantity between the cargo and bunker tanker was high, by which time the vessel would have sailed off.
SAFETY IS PARAMOUNT
If the cargo to be loaded or discharged has a low flash point, the fumes from the bunkering operation could create a significant safety hazard, Universal Terminal’s spokesman said.
Trade sources said the exhaust fumes or a spark from the bunker tanker’s funnel could flow into the receiving vessel’s main deck where the manifolds are and where flammable gases are present. The likelihood of a fire starting is very high, they said.
“Notwithstanding the implementation of the most stringent safety standards, the bunker supplier, bunker barge and receiving vessel will all attempt to disclaim liability,” the UT spokesman said.
“We, therefore, do not want to expose ourselves to such risk and cost which, in our current view, outweighs any advantages in terms of time savings which ship owners may experience,” he added.
Universal Terminal has a storage capacity of 2.33 million cu m, 15 jetties, two of which can berth fully-laden VLCCs.
SUPPLIERS’ OPPORTUNITY COST
For suppliers, the costs incurred in concurrent bunkering, such as hiring a pilot to bring the barge into the terminal, can be a drawback.
Sentek Marine & Trading’s general manager Pai Kheng Hian told S&P Global Platts that it can finish supplying 2,000 mt in 10 hours at anchorage, but not at a terminal because of time spent waiting for a pilot arrive, which can range from one to four hours to take the bunker barge alongside the terminal.
“Suppliers could bill the cost of pilotage to the customer, but the time spent waiting for the pilot is cost,” he said.
Trade sources said as there are a number of safety ordinances from the terminal to adhere to for double banking, suppliers would need to allocate more time for their barges to be berthed at the terminal.
However, this time could be spent doing more bunker deliveries at anchorage, they said.
Sentek Marine & Trading supplied 800 mt of 380 CST bunker fuel and 70 mt of LSMGO to the Stolt Virtue at Stolthaven Singapore terminal’s first concurrent bunkering January 30.
Independent storage tank operator Vopak started concurrent bunkering services at its Sebarok terminal in Singapore in October last year.
COMPETITION FROM OTHER PORTS
Over the past few years, Singapore’s marine authorities have been nudging terminals to provide concurrent bunkering services as a means to increase operational efficiency, trade sources said.
“Malaysian ports like Pengerang, Pasir Gudang are coming up. They could, over time, pose a strong challenge to Jurong Island, especially if they are going to be more flexible in allowing double-banking at their terminals,” a shipping agent said.
“Concurrent bunkering in Japan, South Korea and Europe has been going on for a long time already; double-banking is already done at PSA terminals for container liners, it’s time the other terminals [in Singapore] caught up,” he added.
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Source: Platts
