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.


Farrie Russ vessel. Ernst Russ takes delivery of second methanol-ready tanker  

Farrie Russ joins Ernst Russ’s fleet as the shipowner diversifies into tanker shipping.

Aerial view of the Port of Valencia. Valenciaport launches tender for second substation to double port's power capacity  

The Port of València's new €18.7m substation will support onshore power supply systems and growing terminal electricity demand.

Aerial view of harbour in Karaikal, Puducherry, India Study maps phased pathway for India to build a regional alternative marine fuel hub  

India could compete regionally across biofuels, methanol and ammonia if ports improve efficiency and reduce costs, study finds.

SEA-LNG and MAMII sign MoU. SEA-LNG and MAMII formalise technical partnership ahead of IMO methane talks  

Two organisations sign MoU to strengthen evidence-based input on methane emissions at the IMO.

China Zorrilla vessel. Battery-powered ferry China Zorrilla enters service in South America  

Ro-pax vessel now operating between Argentina and Uruguay, powered by more than 41 MWh of Corvus Energy battery systems.

Monjasa logo. Monjasa shuffles leadership across Asia and West Africa trading desks  

Morten Jacobsen steps down as managing director for Asia, with Simone Piredda relocating from Dubai to take the helm in Singapore

Tue Jensen, Burando Energies. Burando Energies appoints Tue Jensen as head of market risk  

Dutch marine fuels specialist bolsters its risk function amid international growth plans.

Anna Nash, Explora Journeys. Fincantieri floats out Explora V and marks coin ceremony for Explora VI  

Two ceremonies at Sestri Ponente shipyard advance construction of MSC's six-ship Explora Journeys fleet.

BP logo. BP advertises for senior physical bunker trader to oversee Europe and Africa marine business  

London-based trader is required to manage pricing, accounts and strategy across its marine fuels operation.

Ammonia fuel supply chain project signing. Seven Japanese firms join forces on ammonia-fuelled car carrier project  

NYK, K Line and five other companies plan to build four ammonia-fuelled car carriers alongside a dedicated bunkering vessel and supply chain.


↑  Back to Top