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Swift pace of Singapore’s bunker initiatives raises concerns

Swift pace of Singapore’s bunker initiatives raises concerns
The Singapore authorities are planning and rolling out a few key initiatives for its bunkering market, pushing to be a first mover in order to stay ahead of global competition, however, some local players have started to voice their concerns.

One of the major changes for the Singapore market is the mandatory use of mass flow meters during bunkering operations from 1 January 2017, as announced earlier by the Maritime and Port Authority of Singapore (MPA).

In the opening speech to SIBCON 2014, Singapore’s transport minister Lui Tuck Yew applauded the progress of the mass flow meter regulation, and is also looking forward to start LNG bunkering in the port by 2020, or earlier if possible.

To establish safety and operation protocols for LNG bunkering, MPA will be commencing work on a pilot programme by early 2017 with interested parties of the LNG bunker supply chain.

However, industry players have given feedback that mass flow meters will become irrelevant for quantifying LNG, as the mass flow technology is designed to measure higher viscosity liquid such as residual fuel.

A Singapore-based industry veteran highlighted that the enforcement date of 2017 for mass flow meters and the proposed 2020 timeline for LNG bunkering to happen are too close, potentially risking the investments made by bunker tanker operators on installing mass flow meters if they may not be used by 2020.

In addition, IMO regulations on lowering the fuel sulphur content limit to a maximum of 0.50% globally by 2020 or 2025 and 0.10% in Emission Control Areas (ECAs) by 2015 would also make the use of mass flow meters become less relevant when only the low viscosity distillates are to be in use.

“Mass flow meters were introduced to the Singapore bunkering industry seven to eight years ago when the market was facing a lot of quantity problems,” Loh Hong Leong, group managing director of Global Energy, told Seatrade Global. “Mass flow meters may not be so relevant in view of the 0.10% sulphur content limit in ECAs, not to mention LNG bunkering.”

Loh, however, said Global Energy will continue to install mass flow meters on all of its bunker tankers so as to be on a level-playing field in the Singapore market. The homegrown bunker tanker operator and supplier currently operates a fleet of 14 bunker tankers in Singapore and sells 200,000-220,000 metric tonnes of bunkers each month.

Another major Singapore bunker supplier said it plans to install mass flow meters on about two-thirds of its bunker tanker fleet, allowing greater flexibility in the use of the vessels to cater to differing customer requirements.

The new mass flow meter regulation will add on to Singapore’s existing national standards such as the SS 600 and SS 524, both of which regulate bunker players to ensure that bunker deliveries are conducted with a professional level of competency.

Singapore is the world’s largest bunkering market with runaway sales of 42.7m metric tonnes in 2013 and sales of 31.65m metric tonnes in the first nine months of this year.