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Bunkers: Qualifying Quality

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Presentation on theme: "Bunkers: Qualifying Quality"— Presentation transcript:

1 Bunkers: Qualifying Quality
A supplier's view of what really happens John Stirling – World Fuel Services Quality Manager June, 2014

2 World Fuel Services Corporation
2013 Revenue $41.6 billion Market capitalization $3.28 billion Stock symbol NYSE: INT Fortune 500 Ranking* Global headquarters Miami, Florida, USA Founded Number of employees** 2,500 All figures, except employee count, are as of 12/31/12 * Source: Fortune 500 Ranking Issue Date May 6, 2013 ** As of February 2013

3 Global Presence with Over 60 Offices
Miami London Singapore Afghanistan Australia Argentina Brazil Canada Chile Colombia Denmark Germany Gibraltar Greece Hong Kong India Japan Kyrgyzstan Mexico Netherlands Norway Russia Singapore South Africa South Korea Taiwan United Arab Emirates United Kingdom United States 3

4 WFS is #1 in market with 10% share
WFS Manages the Largest Bunker Volume WFS is #1 in market with 10% share Million MT

5 Marine Technical – who are we?
Five professionals with broad technical knowledge and marine educational backgrounds About 180 years experience marine fuel and lubrication quality bunker fuel testing ship machinery and hull Inspection new ship construction project management marine consulting shipboard engineering marine engine design and construction Bob Thornton Dennis Eley John Stirling

6 Marine Technical Sea experience Members of
Multiple types of diesel and steam vessels Members of ISO 8217 Marine Fuel Specifications Working Group ISO Bunkering Protocol Working Group CIMAC Heavy Fuels Working Group IMO's Marine Environmental Protection Committee IBIA Board (International Bunker Industry Association) Immediate past Gajanan Pawar Manuel Vinas

7 Technical Issues Facing the Industry
Frequency of fuel claims Quantity disputes both higher in number & Mt Related to high price of fuel Quality claims more complex – FTIR / GCMS Influence of the testing services

8 Technical Issues Facing the Industry
Environmental Legislation Proliferation of ECAs Rules and enforcement not uniform 2015 – Max 0.1% sulfur in an ECA 2020 – Max 0.5% sulfur global Scrubbers vs using LSGO or 0.5% LSFO if available Is LNG really the future?

9 Technical Issues Facing the Industry
Changing fuel quality Suppliers blending to meet legislation v.s. spec Law of unintended consequences

10 Typical concerns Quantity disputes Use of surveyors
Barge vs ship figures Cappuccino – real or an excuse for sleeve oil Vnet Quality claims Sulfur test accuracy MARPOL vs Commercial testing Study of “normal” bunkers Debunkering may no longer be possible Using what’s on board Sulfur legislation Revision of the EU Sulphur Directive North American ECA : U.S. & Canada Reports of detentions & fines in Europe & USA

11 Additional worries Fuel quality Is it really getting worse?
ISO 8217: 2005 vs 2010 vs 2012 vs Future Blending to meet LSFO with MGO Cost to meet sulfur specs with 95% & 99% certainty Responsibility of the vessel to clean the fuel Future availability – an educated guess Sampling MARPOL vs Commercial samples Why suppliers insist on sampling on the barge Why Owners want it on the vessel What we’ve seen Contractual requirements Supplier’s terms of sale Charter party clauses

12 WFS Bunker Claims

13 Split of Registered Claims - 2013

14 WFS Quality Claims 98.5% of products (MGO & IFO) delivered by WFS are free of claims Of the 1.5% having a claim, only 32% relate to quality Quality Claims = 32% of 1.5% or less than 0.5% of WFS deliveries WFS claims results are 50x lower than the 25% off-spec test results cited by some test labs Some off spec not claimed? Frequently the contractual sample is subsequently tested and found to be on-spec Pay attention to the T&C sample! Since some WFS quality claims relate to experience from vessels, not lab results, the difference is even higher Are we that good or is there some explanation for the extreme difference?

15 But first – Since perception becomes truth
Ask Anything! But first – Since perception becomes truth Is the quality of bunkers really getting worse? Are Catfines increasing dramatically as claimed by many?

16 Are Bunkers Getting Worse?
Courtesy of DNVPS

17 Focusing on Al+Si Courtesy of DNVPS 1717

18 A Dramatic Increase or? Data - courtesy of DnVPS

19 An Accurate Depiction Data - courtesy of DnVPS

20 Use of Truncated Graphs
ISO 2005 ISO 2010/2012 Note that both of these graphs display identical data; however, in the truncated bar graph on the left, the data appear to show significant differences, whereas in the regular bar graph on the right, these differences are hardly visible. Data - courtesy of DnVPS

21 It’s not always the fuel

22 GC-MS Analysis

23 Quality – What’s in Bunkers

24 Would you use this? Sulphate SO4 - 534.6 mg/kg (ppm)
Calcium Ca mg/kg (ppm) Chloride Cl mg/kg (ppm) Magnesium Mg mg/kg (ppm) Sodium Na mg/kg (ppm) Potassium K mg/kg (ppm)

25 San Pellegrino Mineral Water

26 San Pellegrino Mineral Water
Sulphate Bicarbonate Calcium Chloride Magnesium Sodium Silica Residue Strontium Potassium Borates Nitrate Fluoride Bromide Lithium SO4 – HCO3 – Ca++ Cl – Mg++ Na+ SiO2 Sr++ K+ H3BO3 NO3 – F – Br – Li+ 534.6 mg/kg (ppm) 222.7 mg/kg (ppm) 208.0 mg/kg (ppm) 68.0 mg/kg (ppm) 53.5 mg/kg (ppm) 42.0 mg/kg (ppm) 9.4 mg/kg (ppm) 3.5 mg/kg (ppm) 2.8 mg/kg (ppm) 1.2 mg/kg (ppm) 0.77 mg/kg (ppm) 0.61 mg/kg (ppm) 0.40 mg/kg (ppm) 0.18 mg/kg (ppm)

27 THE INTERNATIONAL COUNCIL ON COMBUSTION ENGINES
CIMAC is a worldwide non-profit association consisting of National Member Associations, National Member Groups and Corporate Members in 26 countries in America, Asia and Europe. CIMAC covers diesel and gas engines and gas turbines which are used for power generation, marine propulsion and locomotives. Worldwide members include engine manufacturers, engine users such as ship owners, component suppliers, fuel and lubricant companies, research organisations, classification societies, universities and other interested bodies.

28 CIMAC WG7 - Fuels Who we are
• Engine manufacturers • Handling equipment manufacturers • Ship owners • Fuel analyst institutes • Classification societies • Fuel additive suppliers • Fuel suppliers What we do Prepare recommendations for: • LSFO quality & operation • Bio fuels considerations • Combustion properties • Follow fuel quality worldwide • Fuel grade rationalization • Investigate different fuel compositions Who we work with We are a working group of experienced specialists within marine fuels, represented by the major players, and our goal is to prepare recommendations and make tools for the industry on how to operate on fuel, and choose fuels that will ensure safe operation of the diesel engines. Many CIMAC WG7 members also participate in ISO 8217 TC28/SC4/WG6 Marine Fuels

29 CIMAC - Guide on Sulphur Testing
International Bunker Conference April 3 & 4, 2014 Copenhagen

30 Interpreting a test result in accord with ISO 4259
For the supplier, with a single test result In the case of a maximum specification limit, the specification limit has been met, with 95% confidence, if the test result is less than or equal to the specification limit minus 0.59R.   However, it is further given that this is for the guidance of the supplier, not an obligation, and that a value between the specification limit and the limit minus 0.59R is not proof that that the specification has not been met.   For the recipient, with a single test result In the case of a maximum specification limit, the specification limit has not been met, with 95% confidence, if the test result is greater than the specification limit plus 0.59R.  This means that the recipient with a single test result with a value above the specification limit but below the ‘limit plus 0.59R’ cannot claim that the specification has not been met and consequently has to accept that the product met the specification.

31 The implications of ISO 4259 interpretations
The Supplier If a supplier intends to meet a particular maximum specified limit, they should target a value at or below the specified limit. If the supplier blended the fuel such that the ‘true value’ was equal to the specified limit then there would be as many test results above the specified limit as there were below that limit (50/50) Therefore, despite all the care taken, there remains a slight chance that the result variation will be outside this ‘0.59R’ margin. The supplier has to accept the risk that any test result obtained by the supplier which exceeds the specified limit indicates that the product has not met that specification limit The Recipient The recipient can only consider that a maximum specified limit value has been exceeded if their test result exceeds the limit plus ‘0.59R’. There is the same chance that a result which indicated that the limit plus ‘0.59R’ had been exceeded is not supported by subsequent analysis. Such is the reality of fuel oil testing.

32 ISO 4259 Clear and unambiguous
Since all fuel oil testing is subject to inherent variations, in commercial practice, the assessment of fuel oils as supplied is governed by the provisions of ISO 4259. This in essence requires that the supplier must not obtain a test result over the required specification limit value In contrast the receiver cannot consider a product out of specification unless it exceeds that value by more than the 95% confidence limit which, for a single test result, is given by the reproducibility of the test method multiplied by 0.59 (0.59R) This statistically based process, gives a clear and unambiguous finding with the necessary margin to allow for the reality of variations in test results.

33 The implications of ISO 4259 interpretations

34 Enforcement? Enforcement is inconsistent – confusing
Different from country to country and even port to port Bunkerworld 12th June 2014 11:11 GMT

35 Enforcement?

36 Rotterdam in the forefront….EMSA and Europe
“Follow Rotterdam model”

37 US? Chamber of Shipping America advice

38 A final distillate slide...

39 CP/CFPP/PP CP CFPP PP Cloud point
Temperature at which dissolved particles precipitate and form a cloudy appearance CFPP Cold filter plugging point Lowest temperature at which the fuel will pass through a filter under specified conditions PP Pour point Lowest temperature at which the fuel will flow Courtesy of DNV Petroleum Services

40 Distillates are all very different.....
Courtesy of DNV Petroleum Services

41 Cloud Point (CP)/Pour Point (PP)
Measured using the ASTM D-2500/ISO 3015 test method. Generally, each diesel fuel supplier sets their own cloud point maximums which may vary seasonally. Definition : PP Pour point is measured using ASTM D-97/ISO 3016 test method. Fuel suppliers typically set pour point specifications seasonally. It may not be possible to re-liquify a fuel that has gone solid Fuel must be kept in storage at 5 centigrade degrees above its pour point at all times to reduce the risk of solidification.

42 Cold Filter Plugging Point (CFPP)
Definition : CFPP The Cold Filter Plugging Point (CFPP) is the temperature at which a fuel will plug a 45-micron screen under prescribed test conditions. CFPP is measured using European Test Method IP 309, and is currently the most commonly used cold-weather operability indicator. Although widely used, CFPP has its limitations. (CFPP) Reduction The CFPP of a typical diesel fuel can be reduced by the addition of kerosene. The maximum blending volume is limited by the effect kerosene will have on specific physical and performance properties of the diesel fuel (eg flash, visc) As a general rule the diesel fuel CFPP can be reduced by about 10 C to 20 C for each 10% of added kerosine. Geographically specific Hot and cold climates Arctic

43 Land Based? EN 590

44 What can the challenges look like...

45 Now you can ask anything!
Hopefully!


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