27 September 2006

Distinguished Guests,

Ladies and Gentlemen,

 

It is my pleasure to welcome you to the 14th Singapore International Bunkering Conference, or SIBCON 2006, organised by the Maritime and Port Authority of Singapore (MPA). This year, we have some 600 participants from some 40 countries around the world, making it the largest SIBCON ever. I also welcome you to Singapore's inaugural Maritime Week, of which SIBCON is a key event.

 

The theme for this year's SIBCON is "Bunker Outlook: Managing the Evolving Business and Regulatory Environment". Indeed, the operating environment for the global bunkering industry has seen significant changes in recent years. The challenges that have emerged recently include rising oil prices, the phasing out of single-hulled tankers and the introduction of new limits on sulphur content of marine fuel.

 

Singapore is very much focused on these challenges. As the world's third largest oil refining center, Singapore is a natural bunkering port. Nonetheless, we spare no effort in ensuring that business conditions are conducive for the continued development of our bunkering industry. MPA, in particular, has been active in working with its partners in the bunkering industry to address the key issues and challenges that face the community.

 

Enhancing Competitiveness

To help moderate shipowners' escalating operating costs, MPA has introduced incentives for ships lifting bunker in our port. For example, the Special Bunkering Anchorage (SBA) scheme is a popular scheme, with most of the SBA slots taken up every day. The scheme benefits both shipowners and bunker suppliers. As a group, shipowners enjoy annual savings of some S$2.3 million from the reduced port dues, while bunker suppliers enjoy increased bunker sales, with over 7 million tonnes sold in 2005 under the SBA scheme. Building on the success of the SBA scheme, MPA added four new SBA slots in February this year. This allows more qualifying vessels to enjoy the scheme's port dues concession of over 40 per cent.

 

Gate System for Licensing Bunker Tankers

In line with the IMO's measures to phase out single-hulled oil tankers, MPA introduced the 'Gate System for Licensing Bunker Tankers' last year. Conditions have been imposed on the phasing-out of older bunker tankers, while ensuring that there will be adequate tanker capacity to meet demand for bunker in Singapore. Our priority is to ensure a smooth transition in the phasing out of single-hulled tankers and no disruption to bunker supplies, while fulfilling Singapore's obligations under the IMO. To date, five double-hulled bunker tankers, with a total capacity of more than 30,000 deadweight tons (DWT), have begun operating in Singapore. The industry has also committed to phasing in an additional 50,000 DWT in new capacity by 2008. This will fully satisfy the needs of Singapore's bunker suppliers.

 

Sulphur Content Limits on Marine Fuel

Also in line with IMO regulations, MPA revised the Singapore Standard for Bunkering, also called CP 60, in May 2005 to include more stringent safety and environmental protection requirements, along with new certification procedures in the sale of bunker. This coincided with the introduction of sulphur content limits in marine fuel under Annex VI of the International Convention for the Prevention of Pollution from Ships, better known as MARPOL. In addition, CP 60 includes procedures for the sampling of marine fuel, which we urge all testing laboratories to adopt. Doing so will provide bunker consumers with a standardized measure of the quality of bunker purchased.

 

Today, CP 60 is the only nationally mandated set of bunker quality standards in the world. Through periodic revisions, MPA ensures that these standards remain abreast of international requirements such as those set by IMO. Thanks to the joint efforts of MPA and the bunkering industry, the implementation of the revised CP 60 has been very smooth, with all bunker suppliers in Singapore fully compliant with the requirements.

 

Singapore Standard on Quality Management for Bunker Supply Chain

Ladies and gentlemen,

 

The bunkering industry is an important and integral part of our port. 65% of ships that lift bunkers in Singapore also make use of other services when in port. Our strategy to provide a full range of port-related services to calling vessels has benefited the bunkering industry well. Last year, Singapore was again the largest bunkering port in the world. A record of 25.5 million tonnes of bunkers were delivered in Singapore, twice that of the next largest bunkering port. For the first eight months of this year, bunker sales have reached 18.4 million tonnes, an increase of some 8.9 per cent over the same period last year.

 

Singapore's success as a bunkering port can be attributed to its stringent quality standards, as customers and testing laboratories will attest. Nonetheless, Singapore will continue to improve our bunkering standards and services. With rising bunker prices and new standards governing bunker quality and contents, assurance of the quality and quantity of the bunkers received will become even more important to bunker customers.

 

I am therefore pleased to announce a new quality standard to provide bunker customers greater assurance when lifting bunkers in Singapore - the Singapore Standard on Quality Management for Bunker Supply Chain, or SS 524. SS 524 has been published by the Standards, Productivity and Innovation Board or SPRING Singapore, and was developed by the Technical Committee on Bunkering, a committee which includes representatives from shipping associations, bunker suppliers, testing laboratories and MPA.

 

Singapore's existing standards for bunkering cover operational and surveying aspects. SS 524 complements the existing standards by focusing on the management of the entire bunker supply chain, with clearly specified procedural requirements from product procurement to delivery. This provides a framework to monitor and check bunker quality at every step of the bunker supply chain. For example, bunker suppliers will be required to obtain a Certificate of Quality for the bunkers purchased, supported by a test report from an accredited laboratory, when purchasing bunker.

 

The MPA will adopt SS 524 as one of the criteria for the Accreditation Scheme for Bunker Suppliers. To allow bunker suppliers sufficient time to be familiar with the requirements and prepare for the necessary changes, MPA will implement the SS 524 from 1 June 2007. In the meantime, bunker suppliers are encouraged to improve their SS 524 quality management system and arrange with the accredited certification body to certify their compliance with the Standard.

 

Industry Working Group on Bunkering

Beyond efforts by the Singapore government, I am also heartened by recent industry-led efforts to innovate and improve bunkering services in Singapore. Of note is the recently-formed Bunker Working Group, led by the International Bunker Industry Association (IBIA), that will look into further improving Singapore's bunkering industry, such as technology-based solutions to improve the efficiency of bunker tankers.

 

The size and integrity of Singapore's bunkering industry presents an ideal environment for IBIA to lead the development and testing of new programs to further enhance the bunker supply industry. I applaud the IBIA and the Working Group members for their collaborative efforts, and urge everyone to raise their ideas and suggestions to the Working Group for the collective improvement of the bunkering industry in Singapore.

 

Conclusion

To conclude, I would like to thank all of you for your support of SIBCON, and contributing to its growth over the years. Singapore is committed to maintaining our position as the world's top bunkering port, through ensuring high quality standards, upholding our international commitments under the IMO, working closely with the industry and building customer confidence. I hope that you will continue to support Singapore as your bunkering port of choice, and share your insights on how we can continuously improve as a bunkering hub. On this note, I declare SIBCON 2006 open, and wish you all a pleasant and fruitful time at this conference. Thank you.