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Bunkering Customer Expectation and Dispute Resolution

Bunkering Customer Expectation and Dispute Resolution. Bunkering. Bunker: A Container for Fuel : To Put Fuel into the Bunker. Effect of Bunker Cost. Vessel Type: Suez Max Voyage: Rastanura Mumbai Rastanura Distance: 2786 NM Speed: 13.2 Knots Voyage Days: 15.43

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Bunkering Customer Expectation and Dispute Resolution

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  1. BunkeringCustomer Expectation and Dispute Resolution

  2. Bunkering Bunker: A Container for Fuel : To Put Fuel into the Bunker

  3. Effect of Bunker Cost. Vessel Type: Suez Max Voyage: Rastanura Mumbai Rastanura Distance: 2786 NM Speed: 13.2 Knots Voyage Days: 15.43 Total Fuel Conspn: HO 556.77, DO 17.08 Freight @ WS 129.99 for 95000 MT: USD 545846 Cost of Fuel@ HO USD 325 / MT, DO USD 520 /MT = USD 189831 Cost of Fuel to Freight = 34.7 % Cost of Fuel has a very critical effect on the operation cost of Vessel.

  4. BUNKERING • “Bunkers” is the name given to the fuel which ships burn in their diesel engines. • The transfer of Fuel (FO/DO) from pipelines to a vessel, from barge to vessel, from Tank Truck to vessel, from terminal to barge or vessel, or ship to ship is termed as bunkering.

  5. TYPE OF FUEL USED FOR MAINMACHINARIES ON BOARD A VESSEL. • MAIN ENGINE:- FO, DO. • GENERATORS (AUX. ENGINES):- DO, FO. • AUXILIARY BOILER :- DO, FO. • EMERGENCY GENERATOR / LIFE BOAT ENGINES / EMERGENCY FIRE PUMP ENGINES / EMERGENCY AIR COMPRESSOR ENGINE:- GO / DO. • When sensitive cargoes are being carried and IG generators are fitted they also use gas oil

  6. BUNKER GRADES • F.O. Grades:180 CST(RME-25) 380 CST(RMG-35) • D.O. Grades: MGO(DMA) LDO(DMC) MDO(DMB)

  7. FO – SPEC. AS PER ISO 8217:1996 (E)

  8. DO – SPEC. AS PER ISO 8217:1996 (E)

  9. PERCENTAGE LIFTING PER ANNUM ON AN AVERAGE • LIFTING: • ATFUJAIRAH………………46% • ATSINGAPORE……………24% • ATPORT SAID/SUEZ…...18% • ATUK CONTINENT………08% • OTHERS……………………..04%

  10. QUANTITY SURVEYS: Utmost care to be taken for any quantity shortage All over the World only BARGE FIGURES, BEFORE & AFTER DELIVERY of bunkers are considered for computing the quantity delivered irrespective of the Ship’s soundings. Ship’s staff to witness the barge soundings as well as counter check the quantity received with Ship’s soundings. To avoid the discrepancy SCI has finalised Bunker quantity contract at S’pore & Fujairah/Kalba/Khorfakkan to ensure that surveyor is present before the start of bunkers till the completion & submit the related report and any DISPUTES arising to be shorted out with the bunker supplier.

  11. QUALITY ANALYSIS: • Bunker Cell to arrange for quality testing random cases) & inform Master and Agents for submitting the sealed oil samples collected at the barge manifold for forwarding to contracted lab, so as to receive the report within 72 hrs from the date of supply, which is to be monitored for the recommended remedial measures on board the vessels and if it does not match to ISO: Spec 8217: 1996 E the dispute is to be identified and matter taken up with the supplier.

  12. BUNKERING 2 out of every 5 Oil spills are Bunker Spills • Most Bunker spills are due to : • Poor communication with the barge/shore • Poor condition of bunker pipeline due to infrequent usage • Blow through for clearing the bunker hoses at end of the operation. • Airlock in ship’s pipelines causing oil spray • Open manholes, low level air-pipes & pipelines.

  13. Oil Pollution Act of 1990 Background • OPA’90 was passed as an amendment toFederal Water Pollution Control Act of 1972 • Exxon ValdezIncident Valdez, AK 1989 • Mega Borg Incident Gulf of Mexico • American TraderIncident California • Several Smaller Oil Spills

  14. Oil Pollution Act of 1990 Background • Enacted on18th August 1990 • In Force on18th August 1993 • Applicable toall vessels*

  15. Oil Pollution Act of 1990 Liability UNDER U.S. LAW THE LEGAL RESPONSIBILITY FOR RESPONDING TO AND CLEANING UP AN OIL SPILL RESTS WITH VESSEL OWNER Liability Limits for vessels other than Oil Tankers are GREATER of $ 600 / GT or $ 500,000

  16. Oil Pollution Act of 1990 • CRIMINAL PENALTIES FOR SPILL • $ 2,500 to $25,000 and/orone year imprisonmentfor negligent violation, • $ 5,000 to $50,000 per day and/orthree years for knowing violation.The maximum can be doubled for a secondoffence. • Upto $250,000 with15 years for Knowing Endangerment.

  17. Oil Pollution Act of 1990 • CRIMINAL PENALTY for FAILURE to NOTIFY AUTHORITIES of SPILL • Upto three yearsimprisonment (five years for second offence) • A fine of Upto $250,000 for an individual ($500,000 for an Organisation)

  18. SOPEP - MARPOL 73/78Shipboard Oil Pollution Emergency Plan SOPEPmust be in accordance with the requirements of Regulation 26 of the International Convention for the Prevention of Pollution from Ship 1973 (MARPOL 73), as modified by the protocol for 1978 (TSPP 78) relating thereto, and approved by the Class on behalf of the Flag Administration.

  19. SOPEP Thepurposeof the plan is to provide to the Master and Officers on board the ship with respect to thesteps to be takenwhen a pollution incident has occurred or is likely to occur.

  20. SOPEP The plancontainsallinformation andoperational instructionsrequired by the guidelines issued by the International Maritime Organisation (IMO).

  21. SOPEP – Response Equipment7 Barrel Spill Kit • Sorbentsufficient to absorb7 Bbls of Oil; • Non-sparking handscoops, shovels & buckets; • Portable containerssufficient to hold • 7 Bbls of recovered solid waste, & • 7 Bblsof recovered liquid waste • Minimum60 Ltrsof deck cleaning agent • Personnel Protective Equipment to protect • Inhalationhazard, • Eyeexposure, & • Skincontact • Non sparkingportable pumpwith hoses

  22. 7 Barrel Spill Kit • All of the above equipment to be ready foruse on deck prior any oil transfer. • The pump along with the appropriate hoses must be rigged and ready for immediate use.

  23. Vessel Responsibilities • Make all required and appropriate notifications • Ensure crew is safe and medical assistance arranged for • Take actions necessary and prudent to stop or reduce discharge • Follow your SOPEP / IRAM

  24. Bunker Transfer Procedures • Oil Transfer Procedures must comply with 33CFR155.750 • Must be posted & available as per 33CFR155.740 • Operator must ensure compliance with these procedures as per 33CFR155.730 • Communication systemsas per 33CFR155.785

  25. Face to Face Meetingprior Bunkering • Hold Pre Transfer Conference as per 33CFR 156.150; • Pre-Transfer Checklist as per 33CFR156.120 & 33CFR156.150 has been completed; • Agreement on Methods of communication for start, topping off, change of tank & Stopping the Oil Transfer; & • Agreement on Emergency Shutdown Procedures.

  26. Bunkering Layout PORT DO FO HO To ST. 1 TO DO Storage Tanks To ST 3 To ST 4 TO DO Storage To St. 2 Tanks HO STBD DO FO

  27. AIR POLLUTION PREVENTION MARPOL ANNEX VI REGULATION 14 SULPHUR OXIDES GLOBAL CAP OF 4.5% M/M ON THE SULPHUR CONTENT OF FUEL OIL S0X EMISSION CONTROL AREAS (SECA) ANNEX VI CONTAINS PROVISION ALLOWING FOR SPECIAL SOX EMISSION CONTROL AREAS TO BE ESTABLISHED. IN THESE AREAS THE SULPHUR CONTENT OF ANY FUEL USED ON BOARD IN GENERAL SHALL NOT EXCEED 1.5% M/M. IF VESSEL IS TRADING IN SECA AREAS: ( a ) USE FUEL OIL WITH SULPHUR CONTENT OF MAX 1.5% M/M, OR USE EXHAUST GAS CLEANING SYSTEM TO REDUCE SOX EMISSION TO 6 G/KWH OR LESS. THE BALTIC SEA AREA IS DESIGNATED AS SECA ( WITH EFFECT FROM 19/5/2006) NORTH SEA AREA ALSO WOULD BE DESIGNATED AS SECA AREA BY 2007. OTHER REGIONS ALSO MAY FOLLOW IN DESINATING THEIR AREAS TO PREVENT THEIR ENVIORNMENT POLLUTION.

  28. FUEL OIL QUALITY • REGULATION 18 • THIS REGULATION CALLS FOR NEW MEASURES GOVERNING BOTH SALE AND USE OF BUNKERS WITH THE • OBJECTIVE OF ENSURING THAT FUEL OIL BURNT ON BOARD SHIP DO NOT GIVE OFF HARMFUL EMISSION. • FUEL OIL DELIVERED TO AND USED ON BOARD SHALL BE. • BLENDS OF HYDROCARBON DERIVED FROM PETROLEUM REFINING. • SHALL BE FREE FROM INORGANIC ACID. • SHALL NOT INCLUDE ANY ADDED SUBSTANCE OR CHEMICAL WASTE WHICH EITHER - • ADVERSELY EFFECT THE PERFORMANCE OF MACHINERY. • BE HARMFUL TO PERSONNEL. • CONTRIBUTE TO ADDITIONAL AIR POLUTION. • FUEL OILS DERIVED BY METHODS OTHER THAN PETROLEUM REFINING SHALL NOT. • EXCEED THE 4.5% AND 1.5% LIMITS REQUIRED BY REGULATION 14. • CAUSE AN ENGINE TO EXCEED THE NOX EMISSION LIMITS SET FORTH IN REGULATION 13(3) (a). • CONTAIN INORGANIC ACID AND. • JEOPARDIZE THE SAFETY OF SHIPS OR ADVERSELY AFFECT THE PERFORMANCE OF THE MACHINERY. •       BE HARMFUL TO PERSONEEL OR •       CONTRIBUTE OVERALL TO ADDITIONAL AIR POLLUTION.

  29. Bunker Supplies Bunker suppliers are required to record details of fuel oil for combustion purpose delivered to ships of 400GT and above, engaged in international voyages, by means of a Bunker delivery note containing the following information. Name and IMO number of receiving ship port Date of commencement of delivery Name address and telephone number of marine fuel oil supplier Product names Quantity(metric tons) Density at 15 G(kg/m 3 (ISO 3675) Sulphur Content (%m/m) (ISO 8754) A declaration signed and certified by supplier’s representative that the fuel oil conforms to annex VI requirements regulation 14(i) or 4(a) and 18(i)

  30. Standard Bunker Manifold

  31. Baltic Sea Area Baltic Sea Gulf of Bothnia Gulf of Finland Entrance to Baltic Sea

  32. Bunker Presentation Flanges Vessels 16000 to 25000 DWT 6 inches 25000 to 60000 DWT 6 inches 60000 to 160000 DWT 8 inches 160000 and above 8 inches

  33. Harmful Effects of SOX and NOX Sulphur Dioxide (SO2) and Nitrogen Oxides Causes Acid Rain World Shipping Fleet Releases About 5M Tonnes of SOX Each Year Nitrogen Oxides Form When Fuel is Burned at High Temperature Primary Source of NOX from Ships are Diesel Engine Exhausts. The World Shipping Fleet Releases about 5M Tonnes of NOX Each Year.

  34. Bunker Delivery Bunker delivery notes to be retained on board for a minimum of 3 years and available for inspection. Suppliers must also retain copy of bunker delivery note for at least three years. Suppliers to provide a representative fuel sample on completion of bunkering. From 19th May 2005 all fuel oils to be obtained from duly registered suppliers (registered by the appropriate authorities in the country in which they operate).

  35. Bunker Delivery The regulation imposes following responsibilities on government with respect supply of bunkers in their respective countries. Main register of local supplies of fuel oil. Require local suppliers to provide bunker delivery notes and sealed samples. Require local suppliers to retain bunker delivery notes. Take appropriate action against suppliers found to have supplied non compliant fuel oil. Inform Flag Administration of ship;s found to have non compliant fuel oil during port state control inspection. Inform IMO fur circulation among parties to 1997 protocol to MARPOL convention. All cases where fuel oil suppliers have been found to have supplied non compliant fuel oil.

  36. Areas of dispute. • Quantity of bunkers supplied. • Quality of bunkers supplied. • QUANTITY: • Barge soundings. Before / after supply. Barge to provide certified bunker table and tank and line lay out. • All tanks on board to be checked, soundings taken before and after bunkering. • Provisions of flow meter before ships manifold. • Ship’s fuel tanks soundings / quantity before / after. • QUALITY: • Representative’s sealed samples to be provided. • Oil Specification to be provided. • Specification to confirm to oil delivered • Bunker fuel analysis done by owners at DNV / testing firms.

  37. NORMAL ISSUES: • Water in fuel • Excess Sludge Leading To Purification Problem. • Presence of cat fines leading to fuel pump plunger / barrel seizures. • High sulphur leading to acidic corrosion and main engine liner wear. • Low calorific value leading to high fuel oil consumption.

  38. Conclusion  Know your Role; Know how to implement the Plan;  Follow-through with your assigned responsibilities; &  Stay Alert, Stay Safe, & Keep our Environment Clean.

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