The annual Amsterdam/Rotterdam/Antwerp bunker conference (ARACON) was held at the Hilton Hotel in Rotterdam on the 12th and 13th of October. IBIA was strongly represented amongst the speakers by the Chief Executive, the Vice Chairman, two other board members, one former board member and from our affiliate, the Methanol Institute. There were many IBIA members amongst the 150+ attendees and a very full and interesting programme.
The keynote speeches were from Justin Murphy the IBIA Chief Executive on Ethical Bunkering, and Paul Millar the head of global credit for the Bomin group speaking on the changing view of Credit Management, and finally Rob Phillips of Arcelor Mittal and Chairman of the Institute of Bunker Buyers and Consumers on the needs of the bunker buyer. These presentations were followed by sessions on the global sulphur cap with views from Damien Valdenaire from CONCAWE, Michael Green of Intertek and Naeem Javaid of Lloyds FOBAS. A session on practical compliance with Eelco Dekker from the Methanol Institute covering methanol developments and two presentations from Nigel Draffin on the challenges of the “multi fuel” future and the choices confronting owners and suppliers over the future for Exhaust Gas Cleaning Systems. The session on LNG featured representatives from Shell LNG, Kosan Crisplant and Wartsila and an overview from Mohammad Shafique from Southampton Solent University.
After a magnificent reception and dinner at the Royal Maas Yacht Club the delegates reconvened the next morning for a session on bunker quality and quantity with presentations on gas oil quality, the issues over dealing with debunkering in the Netherlands, mass flow metering and the role of the bunker surveyor. The final session saw a warning on dispute and sales terms from past IBIA board member Steve Simms who told us “You ain’t seen nothing yet” and an explanation of the current status of investigations into price fixing in the Netherlands from Charlotte van Steenderen. The final session was a bunker surgery which included two IBIA board members (Nigel Draffin and Martin Laue Brodersen) and raised a lot of sharp debate from the panelists and the delegates.
What were the highlights? Well first was the attendance, with over 150 delegates of whom over 30 were shipowners. On ethics – Justin Murphy said that IBIA wants to move the ethical agenda forward. We need to recognise the real achievements made and to encourage the open discussion and debate of ethical issues. He said that we should realise that there is more at stake than the principle that the market will reward ethical behaviour.
On credit, Paul Millar had conducted an informal survey of his peers indicating that whilst payment performance was deteriorating, the credit managers’ risk tolerance was improving and they remained willing to look at extended credit. The real concern was the retreat of the banks and the exposure of smaller trading entities and their ability to deal with that.
On buying, Rob detailed the buyers’ wish list but acknowledged that they could not have everything. He emphasised the need for more equitable sales terms and had a plea for traders and brokers on “cold calling” – please don’t do it on Monday mornings!
On the global sulphur cap, CONCAWE repeated that 2020 is set in stone but there may be minor changes in implementation by mid-2019. CONCAWE cannot comment on the plans of its individual members, but said issues included reputation, product quality (compatibility), investment and a level playing field (compliance). They expect that outside of Europe/US, compliance will be only 50%. Scrubbers will represent 5% of fuel used in 2020, 17% by 2025 they predicted. CONCAWE also said refinery capacity for the 0.50% sulphur production in the EU is too low, so there will be a need to import. On the product quality, Michael Green and Naeem Javaid were singing from the same song sheet predicting two new areas of concern. Firstly, more issues with distillates especially with cold flow, oxidation stability and flash point. Secondly, they expect a reoccurrence of the problems seen with the 1.00% ECA fuels from 2012 once we see the new 0.50% fuels, mostly caused by “creative and imaginative” blending.
On compliance we looked at the fuel choices. Nigel Draffin talked about the increasing number of fuel grades, from the conventional to the non-traditional fuels. The choices will be made by both buyer and supplier and for both sides the economics rule. He also raised the one topic we never talk about, the need for training. By 2025 we will be short of 75,000 engineer officers – we have to start training them now.
Eelco Dekker updated us on methanol, which although a minority interest just now has considerable potential to grow. Nigel then covered the pros and cons of Exhaust Gas Cleaning Systems. If the market does what we expect then there is a window of opportunity for early adopters but the key will be continued availability of high sulphur fuel and a period of stability on regulation.
The LNG session gained an additional fuel, as Mohammad Shafique managed to cover LPG in his presentation in addition to his overview on LNG. He also made us think hard about CO2 and the commitments made at COP21. Rob Stassen from Shell gave us an insight into the continuing commitment by Shell to LNG bunkering as evidenced by the delivery of the LNG delivery vessel Cardissa. Lars demonstrated the versatility of RTW delivery systems for LNG, using numerous European examples with some very cost effective and ingenious solutions to multi truck deliveries. The panel discussion prompted a few comments on the cost of LNG barges but I suspect that with time, the designs will get better and the costs will come down considerably.
The morning session on day 2 started with a further focus on the issues with distillate fuel quality. Steve Bee raised the same issues as Michael and Naeem from the previous day but also emphasised the care with regard to microbial contamination and distillate tank hygiene and also the fact that even winter grade DMA may not be suitable for some emergency equipment and operators should understand that grade DMX is available for this particular service.
Reinier van Campen explained the nuts and bolts of the legal arguments that have disrupted debunkering in the Netherlands for the last 3.5 years. Whilst it seems that case law is on the side of the industry, the recent significant cases are still moving though the appeal process so we are not out of the woods yet. Naveen Hegde took us though the basics of Coriolis metering and covered its ability to deal with a wide range of products including all of our new fuels (LNG, methanol, LPG etc.)
We were then treated to a bravura exposition of the challenges and the triumphs of the true independent marine surveyor as our host from the previous night’s reception traced the history of his company. Jaap Beemster of Tanido is no shrinking violet and pushed his case for surveying bunker barges by draught survey rather than by gauges and tank tables.
The last two legal presentations from Steve Simms and Charlotte van Steenderen were a contrast, Steve warning us that much worse was to come whilst Charlotte explained the process of cartel investigation but had to say that because the investigating authority had not yet “gone public” all we heard from the market was rumour and innuendo – but she did tell us to watch this space.
Our final session, a panel discussion, explored many of the topics from the conference and opened up some new and interesting topics however, the combination of lunch, flights home and exhaustion was catching up and Llewellyn Banks-Hughes closed the conference just 25 minutes late. All in all an excellent event, lots of IBIA involvement and lots of discussion on the subjects we have picked for our IBIA working groups.
Report by Nigel Draffin: firstname.lastname@example.org