Singapore, one of the world’s biggest centers for the supply of marine fuels, is now enforcing the mandatory use of mass flow metering systems for the delivery of distillate fuels. The new mandate went into force as of July 1, 2019.
The regulator – the Maritime & Port Authority of Singapore (MPA) – decided on the distillates mandate back on May 10, 2018 following a successful series of trials. To defray the cost of installing an Authority-approved mass flow meter, it offered subsidies of up to SG$60,000 for each existing bunker tanker already licensed to deliver distillates.
The quantity of distillate delivered to ocean-going ships will be as stated in the Bunker Delivery Note, which is based on the reading of the mass flow meter as witnessed by the cargo officer, the chief engineer and any independent bunker surveyor.
Asia’s biggest fuel station
Singapore is one of the world’s largest, if not the largest, locations for the supply of marine fuel. In 2018 it sold a total of 49.8 million metric tons of bunkers. A metric ton is 2,204.6 U.S. pounds. The vast majority of that was viscous fuel oil – 35.7 million tons of 380 centistoke marine fuel oil. Last year, 746,800 tons of marine gas oil were also sold in Singapore.
Data: Maritime and Port Authority of Singapore. Graphic: FreightWaves.
Data: Maritime and Port Authority of Singapore. Graphic: FreightWaves.
Enforcement action
With such a large, and valuable, industry, the MPA takes its marine bunkering very seriously.
“All MPA licensed bunker suppliers, bunker craft operators, bunker surveying companies and bunker surveyors are reminded to adhere strictly to the terms and conditions of their bunker licences… for bunker delivery by MFM in the Port of Singapore. MPA will take firm action against any licensee that has acted in contravention of their licences, including suspending or revoking their bunker licences, as appropriate,” the Authority said.
For instance, in late May this year, the Authority revoked the bunker supplier license of Southernpec (Singapore) Pte Ltd. Southernpec is no longer allowed to supply bunkers after government inspectors found that employees were using magnets to interfere with mass flow meters used to deliver heavy fuel oil. Southernpec’s cargo officers also did not record information accurately in bunkering documentation.
There are other examples of enforcement action, such as the action against TransOcean in 2017.
Mass flow meters have been mandatory in Singapore for use in the delivery of marine heavy fuel oil since January 2017.
Meters for measuring the mass flow of liquids
Pictured: an example of a mass flow meter. Photo: Shutterstock.
In a mass flow meter, fluids pass through a flexible “U” shaped measuring tube. An exciter device causes the empty measuring tube to move in a regular, predictable way. Inlet and outlet sensors precisely detect and record that movement.
When fluid enters the measuring part of the tube then, because of the Coriolis Effect and because of the kinetic energy imparted by the moving fluid, the tube will begin to twist and wriggle. This motion can be very accurately detected and will reveal the exact mass of the fluid.
Somewhat simply, a mass flow meter measures, well, mass, as opposed to weight.
“Mass” is the amount of material in an object (or substance). “Weight” is the force of gravity pulling down on an object. For the vast majority of us in our everyday lives, “weight” and “mass” are used interchangeably in conversation without any ill-effect.
But when large volumes of a highly valuable liquid are being bought and sold on the basis of dollars per ton of mass delivered, then the exact and precise amount of mass becomes very important.
Marine gas oil prices in Singapore
For instance, on Friday June 28, the price of marine gas oil (a distillate fuel) in Singapore was SG$602 (US$445) per metric ton.
Buyers of fuel want to receive all the fuel they have actually paid for.
But fuel, unfortunately, has a few annoying characteristics from a measuring-the-amount-delivered perspective. Its volume shrinks and expands with variations in temperature. It can become less dense if air gets entrapped within it (the so-called “cappuccino bunkers” effect). Or the fuel could have water in it.
And, prior to the introduction of mass flow meters, measuring the amount of fluid transferred from a bunker barge to a ship involved surveyors taking the temperature of the fuel, dipping sticks into the fuel, carrying out manual calculations and recording the transaction on paper.
All of these factors mean that the buyer could be paying for fuel he or she did not actually receive. And it might not just be an innocent mistake. Sadly, there have been plenty of examples in the past of short-deliveries as part of a bunker-delivery fraud.
A 1.5 percent delivery shortfall costs an awful lot of cash…
But back to the mass flow meters. Liner shipping company Maersk has in the past (in the days before mass flow meters) complained of differences of up to 1.5 percent in the seller’s record of the amount of heavy fuel oil delivered and its own figures.
Let’s see how that might make a difference.
Firstly, it should be noted there are many different grades of marine fuel. For instance, “DMA” (also known as “marine gasoil”) is a pure distillate marine fuel used by tugs and ferries. Large commercial cargo-carrying ships would normally use some other mix of fuel. The actual mix of fuels used will depend on the ship and its fuel system configuration. To keep the explanation of this example simple, we’ve just assumed the use of marine gas oil.
Let’s assume a 10,000 twenty-foot equivalent unit container ship fuels up with marine gas oil in Singapore for a trans-Pacific trip to Long Beach, California. That’s a distance of 14,801.30 kilometers (9,197.10 miles). Let’s further assume the ship is slow-steaming which would give it a speed of 19 knots (35.19 kmh; 40.49 mph). It would consume of 150 tons of fuel per day.
That’s a journey of about 421 hours, or 17.5 days. Multiply that by 150 tons per day and the hypothetical big box ship would need about 2,629 tons of fuel, roughly. With a marine gas oil price of about SG$602 per metric ton, the ship would need to pay SG$1.58 million (US$1.17 million).
So a 1.5 percent shortfall in the delivery of marine gasoil for our hypothetical voyage would lead to an overcharging in the price of about SG$23,740 (US$17,534).
Maersk trialled the use of mass flow meters
So that may, or may not, be a large figure for your wallet. But the bigger international shipping companies may be measuring the size of their fleets in the multiple hundreds. A Maersk spokesperson today told FreightWaves that Maersk currently roughly operates about 700 ships.
And when a company is sailing 700 ships about the world, then a US$17,500 variation in fuel bills per voyage is something that needs to be addressed.
Maersk was banging on the drum about this very topic a few years back for this exact reason. Back in 2010, the company was buying 13 million metric tons of marine fuel and carried out 12,000 bunkering operations. With a 1.5 percent variation between Maersk’s readings and that of the suppliers, there was plenty of room for dispute.
A series of field trials were arranged in Singapore with (what was then) a newer type of mass flow meter. Results from trials found an average error of less than 0.5 percent. The meters were also able to detect air in the pipes. Maersk became a convert to mass flow meters.
Since then, the rest of the world has followed.
FreightWaves sought comment from the Maritime & Port Authority for this article; however, no one was available.
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