Analysis: Singapore bunkering standards usher in era of transparency, cost savings

Singapore — Singapore's two new bunkering standards -- Singapore Standard 660:2020 and Technical Reference 80:2020 -- launched on Oct. 7 and related to mass flow meters will increase transparency and provide further quality assurance in the maritime industry, which is already reaping the benefits of productivity enhancements and cost savings after the implementation of TR 48 in mid-2016, industry sources said.

"They [standards] have contributed to the digitization efforts of the bunkering industry and strengthened Singapore's position as a trusted bunkering hub," Choy Sauw Kook, director-general quality & excellence at Enterprise Singapore, said Oct. 7 in a joint statement issued by Enterprise Singapore, the Maritime and Port Authority of Singapore, the Singapore Chemical Industry Council, the Singapore Development Organization and the Singapore Standards Council.

SS 660 defines the quantity measurement requirements during bunker cargo delivery from an oil terminal to a bunker tanker using the Coriolis mass flow metering or MFM system. It aims to harmonize the quantity measurement methods at oil terminals and bunker tankers for better accuracy and inventory management.

TR 80 defines the requirements and procedures for meter verification using a master MFM to verify and check the stability and performance of a duty meter installed on a bunker tanker or at an oil terminal.

Singapore, the world's largest bunkering port, mandated the use of MFMs for fuel oil deliveries from Jan. 1, 2017, and the use of MFMs for all distillates bunker deliveries from July 1, 2019. MFMs measure the flow rate in the pipe, gauging the quantity as well as the mass and density of the fuel.

The MPA since June 2016 has required adherence to TR 48, the first standard that defines a set of core requirements for metering system qualification, installation, testing, procedures and documentation of bunker custody transfer using the Coriolis MFM system.

The TR 48 has the potential to reap annual savings of between S$80 million [$58.8 million] and S$199 million for the industry, according to the joint statement.

TR 48 has since been upgraded to a Singapore Standard SS 648, which includes new requirements for distillate fuels and bunkers to meet the International Maritime Organization regulations.TR 48 and SS 648 have also formed the basis for the development of two ISO standards on bunkering, it added.

MARKET CONFIDENCE BOOST

"From a shipowners' perspective, when we think about where to procure our bunkers, we think of a place which we can rely on and that has so many facets," Peter William Beekhuis, Head of Trading, Asia, Middle East, Oceania at Maersk Oil Trading, Singapore, said on Oct. 7 during a roundtable discussion at the 21st Singapore International Bunkering Conference and Exhibition.

When it comes to a vessel making a stop and completing so many operations -- cargo, crew change, some repairs and bunkering -- Singapore is ideal to get it done quickly and efficiently, he said. With the introduction of TR 48, MFMs have reduced the time for bunkering operations, he said.

"With the MFMs, we also don't see as many [quantity] disputes. If we look at the introduction of mass flow meters, after 2017 basically quantity disputes are a thing of the past," he said.

The support of the government and that of the MPA for TR 48 has further cemented the success of the TR, Beekhuis said. The ultimate endorsement of the regime is that volumes in Singapore have remained very strong even after the introduction of the TR 48 standard, he added.

At the same event, Timothy Cosulich, CEO of Fratelli Cosulich, said that while suppliers can potentially still cheat with the MFM, the big difference is that with MFMs there would always be a trace.

The MPA has been a stickler for enforcement, revoking the licenses of several errant players, some of whom had been sizable bunker suppliers. This has been done even at the risk of disruption in the market, he said.

"They [MPA] did not compromise the integrity of the system for customers around the world and we think that is what makes a difference," Cosulich said.

The standards have improved not only the trading environment, but also bunkering operations, he said.

"As a trader, we used to have a lot of claims in Singapore. Now we definitely have a significant reduction in claims, so it's a lot more efficient," Cosulich said.

"As a physical supplier, our operations are a lot smoother. We can turn around our barges a lot more," he said, adding that this was beneficial for oil majors who charter the company's barges as they can be more efficient

It eventually also helps the clients because they will have a better service that could translate to better prices for them, as they pay for exactly what they get, he said.

Away from SIBCON, a Singapore-based bunker trader said the development of bunkering standards would also help to keep competition at bay.

"Instead of competing on price, we can attract shipowners to bunker in Singapore with the MFM, which assures them that they are getting the volume they paid for," he said.