This is a legacy page. Please click here to view the latest version.
Tue 27 Aug 2013, 11:48 GMT

IBIA calls on South Africa to realize its bunkering potential



The International Bunker Industry Association (IBIA) has called on the South African government to realize the potential of the ship refuelling market in its ports and the impact this will have in supporting regeneration.

Speaking at the African Ports Evolution conference in Cape Town today (27 August), IBIA chief executive Peter Hall told delegates that whilst more than double the number of vessels move around the Cape of Good Hope than transit the Straits of Gibraltar, the South African bunkering market has declined whilst Gibraltar's continues to grow.

Last year, around 600 ships a day moved around South Africa, whilst the volume of bunkers sold in Durban hit a twenty year low with 1.1m tonnes traded in 2012. 2013 sales volumes look set to decline further as the area struggles with current market forces.

IBIA has advised the country to open its bunker market to an open economy system; produce fuel in line with global carbon and sulphur restrictions; adjust its fuel pricing structure to be competitive against South American and Asian port options and create safe offshore refuelling areas.

Partnering with neighbouring countries for crude cargo purchasing and keeping its port tariffs relevant and competitive can revitalise an industry "on the verge of collapse", says IBIA. The association believes that these steps would help stem the decline in South African bunker fuel sales. It says the South African government should closely examine the potential impact of a successful bunkering sector on the country's GDP and develop a strategy in partnership with industry stakeholders, including the oil majors who own the current aging infrastructure.

Hall said: "It is time that that we all awoke to the enormous potential that is currently lying dormant in South African ports. The annual gain of an additional 900 ships a year in Durban for example would contribute an estimated 2.4 trillion rand (USD 126 million) a year to the South African economy, excluding the value of bunker sales. A growth in the country’s bunkering market would have a huge benefit to the South African economy specifically in terms of job creation and community regeneration. Competitively priced bunkering facilities in SA ports would also benefit IBIA's owner and operator members as well as suppliers and the SA economy."

He added: "The country is strategically very well located to handle vessels servicing the predicted increase in South American to Asia dry bulk trades as well as Asia to South America container traffic. Increased bunkering would mean increased business for port operations firms, oil producers, barging companies as well as international bunker trading companies."

The reasons for South Africa’s decline in the ship refuelling market are numerous, according to IBIA.

The availability of South African fuel has historically been termed as 'feast or famine', which can be attributed to limited fuel storage facilities and inconstant refinery turnarounds which are unable to give the shipping market sufficient notice of refinery shutdowns. These occur primarily because the aging refineries are constantly being upgraded to produce the more lucrative "white oils" than residual fuel oil. In recent years residual fuel oil production volumes have remained unchanged with the balance of unsold fuel being expor ted to eastern markets. It is estimated that around 80,000 tonnes a month is distributed in this manner. These refineries are also unable to produce the low sulphur, low carbon, 380-centistoke (cst) fuel which ship operators require. Added to the problem is the fact that port call and bunker costs are high; the supply of fuel from offshore barges is banned and there is little competition in the market with only four suppliers serving the sector.

"Bunker vessels are just too low on South African ports' list of priorities. There is currently limited port berthing for bunker vessels in all ports with vessels being dealt with on a first come first served basis. And all too often the focus has been on developing container facilities rather than bunkering facilities in recent port upgrades," said Hall.

IBIA has approached Professor Trevor Jones of the University of Kwa Zulu Natal, Marine Studies to undertake a study of the impact that the loss of bunker fuel sales has on the economy of Southern Africa.


Vasileios Analytis, Burando Energies. Burando Energies appoints Vasileios Analytis as commercial director in Dubai  

Marine fuel trader promoted following expanded trading activity and commercial development.

Japan Engine Corporation (J-ENG) logo. J-ENG starts development of methanol-fuelled marine engine  

Japanese engine maker targets 2027 completion for UEC50LSJM model following ammonia and hydrogen engine projects.

Mureloil 8,000-dwt vessel render. AYK Energy secures second battery contract with Mureloil for chemical tankers  

Spanish ship owner orders hybrid propulsion systems for two 8,000-dwt vessels transporting biofuels and methanol.

21,700-teu vessel render. DNV approves 21,700-teu container ship design with ammonia fuel capability  

Design by Zhoushan Changhong and CIMC ORIC can accommodate LNG or ammonia propulsion systems.

Yara Eyde vessel render. CMB.Tech invests in Chinese ammonia supply chain ahead of fleet deliveries  

Belgian shipping group secures green ammonia offtake and takes stake in Andefu supply company.

Peter Keller, SEA-LNG. UK P&I Club joins SEA-LNG coalition to support LNG marine fuel adoption  

Insurer brings 50 years of LNG experience to methane pathway coalition focused on maritime decarbonisation.

FCM LNG fuel supply system render. Alfa Laval launches LNG fuel supply system with cryogenic technology  

Swedish firm unveils FCM LNG system for LNG-powered vessels, with marine deliveries planned for 2027.

Union Maritime's chemical tankers with Anemoi Rotor Sails. Union Maritime orders Anemoi rotor sails for two chemical tanker newbuilds  

Wind propulsion technology to help shipowner exceed IMO 2030 greenhouse gas reduction targets.

Iona vessel. Lloyd's Register completes Europe's first major LNG cruise ship dry docks with Carnival  

Iona and Mardi Gras projects required 18 months of planning and in-service passenger inspections.

Anglo-Eastern's ammonia pilot training course. Anglo-Eastern completes pilot training course for ammonia-fuelled vessels  

Ship manager prepares crew ahead of first ammonia-fuelled vessel takeover with inaugural training programme.


↑  Back to Top


 Recommended