Off-specification bunkers supplied in Singapore

The club is aware of several incidents where vessels have suffered damage to the main engine due to off-specification bunkers supplied in Singapore during the months of February and March 2022. The club is presently dealing with a number of cases and various sources in the market have confirmed that cases are increasing.

The contaminants

1. The main contaminants are chlorinated hydrocarbon compounds which can provoke excessive engine wear and potential damages to fuel pumps and valve, among other issues and could even cause complete engine shutdowns.
2. Certain reports issued by service providers also state that the tested fuel oil samples have a higher Total Sediment Potential (TSP) and a flash point below 60^oC which is a breach of SOLAS CH II-2 regulation 4.
3. Chlorinated hydrocarbons are not naturally present in crude oil. Members should note that its presence in bunker fuel hints at a possible contamination and a potential breach of international marine fuel standard ISO 8217:2010,  Clause 5 and MARPOL Annex VI regulation 18.3 which requires that marine fuel supplied to ships is free from any contaminants or chemicals that may jeopardise the safety of the ship or adversely affect the performance of the machinery.

Practical steps to take

1. As soon as members become aware of the potential off-specification bunker issues, the matter must be notified to the club.
2. Sampling, testing and analysis should be carried out in accordance with the terms of the relevant contract. Further testing and analysis should be carried out in laboratories with the necessary equipment/facilities to conduct these tests.
3. Standard ISO test methods are not capable of detecting the presence of chlorinated hydrocarbons in marine fuels. It is required to carry out additional Gas Chromatography – Mass Spectrometer (GC-MS) test to detect for contaminants.

Loss Prevention Recommendation 

Use of contaminated fuel on a ship can have far reaching consequences. Not only can it cause damage to the ship’s machinery and delays to the ship, but any breakdown of machinery can also lead to incidents of catastrophic nature such as groundings and collision.

The club has published guidance on Use of IMO 2020 Compliant Fuels and operational experience with guidance on fuel stability which is available on our website.

We further recommend:

1. Members who have recently stemmed bunkers in Singapore to be aware of the possible presence of chlorinated hydrocarbons.
2. The fuel should be kept segregated from other fuels onboard and should not be mixed.
3. Members should seek additional information from the suppliers if the fuel has been tested for chlorinated hydrocarbons. If the fuel has not been tested, then we recommend the members to consider getting the GC-MS test conducted prior to using the fuel.
4. Ship staff to pay particular attention to the ideal operational parameters of the machinery and the purification system on board the ships. Fuel samples can be checked and tested before and after the purification process to give an early indication of excessive wear and tear or sludge formation.
5. Bunker samples taken at the time of delivery should be preserved as they can serve as evidence that may help to resolve any possible disputes in the future.
    

Consideration for claims handling

1. The member should check the contractual obligations under the relevant bunker supply and / or charterparty contracts.
   a) Where members have contracted directly with the bunker supplier, remember that the supply contract’s general terms and conditions often contain onerous terms , such as very short time limits (sometimes measured in days) to notify the supplier of any potential claim, failing which a claim may be time barred.
   b) On the other hand, if the bunkers have been ordered by time charterers of the vessel, then the obligation is with the charterers to (i) deliver fuel which contractually meets the specifications as set out in the Charterparty and (ii) to provide fuel which is suitable for use by the vessel. Again, the terms of the charterparty will need to be carefully reviewed.
    
2. We recommend that members liaise closely with the club to ensure that accurate and complete documentation of the claim is obtained and / or preserved. Under English law, the burden lies on the claimant to prove his claim.
    
3. Note that if bunkers supplied are off-specification, owners will need to give consideration to mitigating their losses, even if this means incurring reasonable expenses. Practical mitigation steps could include further sampling and testing, laboratory analysis, treatment of fuel to make is safe to burn and / or potentially even de-bunkering the off-specification fuel .  It is often sensible to first discuss such steps with contractual counterparties, inviting their comments and potentially inviting them to testing or other steps.  If this is the route the member ends up taking, it is important that a close discussion takes between the member and the club (also the member’s lawyers, if retained), to ensure that the member’s interests are fully protected.

Cover

If the vessel does suffer damage to its engine, cover for that damage will typically lie with the owner’s Hull and Machinery policy. P&I cover tends to be limited to any 3^rd party liabilities, but for those members with Defence cover, the club is on hand to support members who may be pursuing or defending a claim against the counterparty under the relevant contract.

It is often the case that bunker quality claims require detailed consideration of the relevant contractual, technical and evidential issues, which can be complex.. If a member becomes aware of a bunker claim, it is important that the club is notified as soon as possible. This helps the club provide all the necessary assistance to ensure that the member can be appropriately advised and benefits from the club’s experience.

We strongly recommend that members keep this latest bunker situation in Singapore under close review, including ensuring that all the appropriate measures are taken before bunkers are stemmed to the vessel in Singapore and before use.  We will continue to closely monitor the situation and update you about any further developments. If you have any queries in the meantime, please reach out to your usual club contact.

Category: Loss Prevention