- Singapore all set to implement compulsory use of mass flow meters for distillate bunker fuel deliveries and expect the transition to be smooth.
- Seventy bunker tankers delivering distillates to ocean-going ships have been installed with an MFM as of now.
- MFMs for distillates move comes after Singapore implemented the MFMs mandate for fuel oil deliveries starting January 1, 2017.
According to an article published in Platts, less than three days remain for Singapore, the world’s largest bunkering port, to implement the compulsory use of mass flow meters for distillate bunker fuel deliveries.
Smooth transition expected
The industry expects a smooth transition as it embraces this change. “It will be mandatory to adopt the MPA (Maritime and Port Authority of Singapore)-approved mass flow metering, or MFM, for the delivery of distillates in the Port of Singapore from July 1, 2019,” an MPA spokeswoman said on Friday.
MFM measures in place
MFMs measure the flow rate in the pipe, indicating the quantity as well as the mass and density of the fuel.
Seventy bunker tankers delivering distillates to ocean-going ships have been installed with an MFM as of June 26, the MPA said in a statement to S&P Global Platts.
Close to 80% of these tankers will receive the MPA’s approval for MFM bunker delivery by June 30, while the remaining bunker tankers are currently undergoing acceptance tests and those that qualify will receive MPA’s approval by mid-July, it said.
Tanker and bunker operators stay away
“For owners/operators of bunker tankers that have decided not to install an MFM on their tankers, they are aware that they will not be allowed to supply distillates to ocean-going ships from July 1, 2019,” the MPA spokeswoman added.
The move towards MFMs for distillates comes after Singapore implemented the MFMs mandate for fuel oil deliveries starting January 1, 2017.
Skepticism by some around the efficacy of MFMs back then has waned in the city-state as the market digested its benefits over the years.
Increased efficiency and transparency
MFMs have not only ushered an era of transparency and efficiency in bunkering operations in Singapore but also weeded out errant players, instilling more confidence among shipowners while sending signals to other global bunker hotspots to follow suit.
“It [MFMs for distillates] is going to be smoother this time as the market has already undergone a transition last time for fuel oil deliveries,” a bunker trader in Singapore said.
IMO 2020 Ready
The move to implement MFMs for distillates also places Singapore in good stead ahead of the International Maritime Organization’s global sulfur limit rule for marine fuels.
“Such a move is quite timely now that the IMO rule is also nearing and we expect more and more demand for marine gasoil,” another bunker trader said. The IMO will cap global sulfur content in marine fuels at 0.5% starting January 1, 2020, compared with the current 3.5%. This applies outside the designated emission control areas where the limit is already 0.1%.
Shipowners will have to either burn cleaner, more expensive fuels or install scrubber units for burning high sulfur fuel oil to comply with the rule.
The use of MFMs for distillates would help to reduce the discrepancy in such bunker fuel volumes and in dispute management as demand for cleaner fuels soars due to impending environmental regulations in shipping, sources said.
Demand for distillate bunkers has already been rising steadily in the Port of Singapore ahead of the IMO 2020 rule. Low sulfur marine gasoil, or LSMGO, volumes between Jan-May totaled 1.06 million mt, surging 78% compared to total sales between the same period last year, the data showed.
Barging costs
“While the premium [for marine gasoil] is likely to go up to some extent, we don’t think it’s going to be very significant,” a shipowner who takes bunkers at Singapore said.
“Some suppliers are charging an extra lump sum barging cost in July but this is only for small parcels, say below 100 mt,” the shipowner added.
The lump sum barging fee could range between $1,500-$2,000, on top of the delivered bunker price for an LSMGO parcel that is less than 100 mt, market sources told Platts last week.
For better economies of scale arising from faster barge turnarounds, suppliers are also increasingly looking to offer only to inquiries for volume sizes of 100 mt and above, and have likely started sounding out customers or potential clients of their preference, they added.
Players will be looking out for developments relating to the use of MFM for terminal loadings in Singapore next, sources said.
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Source: Platts
