Chemoil Concerned Re ISO 8217 Revisions

Tuesday, January 12, 2010

SGX Mainboard-listed Chemoil (SGX-ST: CHEL.SI), an independent physical suppliers of marine fuel, is urging the International Standard Organization’s (ISO) working group which is currently reviewing changes to bunker fuel specifications, ISO 8217, to ensure there was a broad, cross-industry consensus for a fair and equitable revision to the Standard.

Responding to recent claims that current recommendations ISO/DIS (Draft International Standard) 8217 were too lenient and in favour of the bunker supplier, Chemoil has highlighted a number of issues raised within the proposed revision that, if implemented, could trigger rising bunker fuel costs for ship operators and will increase disputes over fuel specifications.

Adrian Tolson, Chemoil’s Vice President of Sales and Marketing, said: “Chemoil is alarmed at a number of rushed and ill advised changes proposed to ISO 8217 that could lead to a reduction in the availability of bunker fuel in many ports, increase bunker fuel costs for ship operators and generate an increase in unnecessary contractual disputes at multiple stages of the bunker supply transaction. There is a real danger of the proposed regulations forcing ship operators to take unnecessary risks in buying bunkers that do not meet the new specifications because suppliers are forced to sell fuel with multiple exceptions to the new ISO 8217.

“With the proposed reductions of Aluminium (AI) and Silicon (Si) to 60 parts per million (ppm) from 80 ppm, Chemoil is against further reductions from current levels. Historically, levels of Al+Si up to 80ppm have not caused any abnormal wear issues on ships engines provided that a ship’s fuel treatment plant is working properly.

“This current limit has served this industry well for many years and a decrease to 60ppm is completely unnecessary. Moreover, the increasing trend towards low sulphur residual bunker fuel conflicts directly with the proposed reduction of Al+Si. These metals (Al+Si) are found typically in the lower sulphur blend stocks used to produce low sulphur bunker fuel. The net result would be the increased use of more costly, blend stocks.

“In addition, Chemoil joins multiple industry experts in our belief that Calculated Carbon Aromaticity Index (CCAI) is not always a reliable indicator of ignition quality. CCAI values are not derived from standard testing protocols, rather it is a calculated value based on other measurements and parameters. The current proposals not only validate CCAI as a measure of ignition quality, but also would define, as ‘offspec’, a high percentage of higher viscosity RMK bunker fuels currently being sold and used with no problem. The loss of these fuels from the market would reduce the supply of RMK and lead to an increase in costs to bunker fuel buyers.”

Tolson said massively conflicting views over the proposed changes to Aluminium and Silicon as well as the CCAI introduction are only two of many areas of controversy, which highlight the need for more industry consultation and consideration to be taken into account when laying out what are substantive changes to ISO8217.

“The current DIS is disputable on many levels,” Tolson said. “What is needed and expected is cross industry consensus. We must ensure that any revisions to ISO 8217 are both balanced and reflect the realities of the marketplace.”

(www.chemoil.com)
 

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