OPENING ADDRESS BY MS QUAH LEY HOON, CHIEF EXECUTIVE, MARITIME AND PORT AUTHORITY OF SINGAPORE AT THE MPA-SSA SEMINAR ON IMO 2020 SULPHUR LIMIT, THURSDAY 13 JUNE 2019

13 June 2019

Good morning, everyone. A warm welcome to the MPA-SSA seminar on IMO 2020 Sulphur Limit.  I see many familiar faces here today, and let me first thank you for your feedback relating to the IMO2020 low Sulphur Limit.

2 We are drawing near to January 2020; 6 more months to the IMO’s deadline. In the past months, MPA, including myself, have consulted the industry extensively, be it oil majors, bunker suppliers, traders, ship owners, or ship operators.  From our conversations, some are more prepared than others.  Almost all have made their decisions – scrubbers or compliant fuels.  Some have tested and done trials.  Many will gradually move to compliant fuels by the last quarter of this year.

3 This is not completely new for some in the industry.  The industry has had to deal with similar situations in the past during the tightening of sulphur limits for certain areas in Europe and China.  The industry has adapted to the series of sulphur limit changes.

4 MPA has started our preparations on this new regulation at least one year ago.  To help ease the transition, MPA has done the following:
• Publication of technical guides last November;
• Availability of compliant fuel – oil majors have assured us that there will be availability of compliant fuel.  We have also published a list of licensed bunker suppliers who can provide compliant fuel; and
• Reception facilities for residues generated from the operation of closed-loop scrubbers.

5 We are well aware that industry remains concerned, as with any change or new regulations kicking in.  This is the reason why MPA and the Singapore Shipping Association (SSA) have organised this seminar for MPA to update you on the latest matters, for best practices sharing, and for all stakeholders to hear each other out and move forward together as Maritime Singapore.

6 Three areas of concern which we have heard:
• Price differentials between the different fuel oil grades,
• Safety issues with blended compliant fuel,
• Enforcement of IMO 2020 requirements in Singapore.

Let me elaborate.

7 On pricing issue, the average price differential between heavy fuel oil and low sulphur marine gas oil has been estimated to range between USD30 to more than USD300. The price of marine gas oil also continues to be dynamic.  We will see an increasing demand for compliant fuel, be it 0.5 per cent low sulphur fuel oil or marine gas oil, towards the end of this year, but I understand that oil majors have prepped for this surge in demand, so it remains to be seen if the price for compliant fuel will go up and down.  I hope this is a concern that our oil representatives here today can help address.

8 On safety concerns of blended fuel, in order to address the uncertainty on the specifications of the new 0.5 per cent sulphur marine fuels, ISO is working on an interim document, known as Publicly Available Specification (PAS), targeted to be ready by August 2019.  ISO has given assurance that the existing ISO 8217 specifications will cover the new low sulphur marine fuel.  A couple of oil majors have also successfully completed on board fuel trials of low sulphur fuel in Singapore. Ship operators have also shared with us that their vessels already have existing procedures in place to minimise the commingling of fuel oils using bunker segregation.

9 For the two concerns relating to price and safety of blended fuels, we have invited Shell, IPIECA and Argus to share more of their plans later.

10 On enforcement, MPA will inspect Singapore-registered ships as well as foreign-registered ships calling the Port of Singapore in accordance with the Flag State and Port State Control regimes respectively.  Ships will be selected for inspection based on a risk matrix, which takes into account the compliance option of the ship and whether a Fuel Oil Non-Availability Report (FONAR) has been submitted.  Our inspectors will also be equipped with portable sulphur test kits for onsite testing of in-use fuel.  If necessary, we may send the fuel oil sample to the laboratory for detailed fuel oil analysis.  Mr Goh Chung Hun, my colleague, will provide more details during his presentation later on.

11 A few companies have shared with us that they are ready for this transition: BW Group, Maersk Tankers, Pacific Carrier Limited, AET and PIL, have indicated to us that they are ready for IMO 2020.  BW Group will share the preparations that they have made to ensure compliance with the IMO 2020 requirements from the ship owner’s and operator’s perspective, and we hope that such sharing of best practices and experience will be useful for you today.

12 From MPA’s part, we will continue to do our utmost to support the smooth transition for you.  I am pleased to announce the following:
• Second edition of technical guidance – MPA and SSA have published the second edition of two technical guidance booklets on IMO 2020 – one for Singapore-registered ships; one for ships that call at Singapore.  This builds on the first editions that were launched at SRS Forum in November last year.  These booklets will provide detailed guidance and best practices for ships to comply with the IMO 2020 regulations, as well as the requirements and procedures that ships have to abide by when calling at Singapore.  Hard copies of these guidance booklets are available here today.  You can also download the electronic versions from MPA’s website.

• Bunkering – We will develop a separate guidebook for the bunkering industry, which will detail best practices for fuel oil suppliers.  We expect this booklet to be ready by the third quarter of this year.

• Workshop with Port State Authorities – MPA will also hold a workshop with like-minded Port State Authorities in August to share best practices and discuss implementation issues.

• 2019 SRS Forum – We will also have a final round of industry engagement during 2019 SRS Forum, which will take place in November this year.

13 MPA is committed and will continue to work with all stakeholders on the transition and implementation of the IMO 2020 regulations.  We may not solve all the problems, but rest assured that MPA will give you the support that the industry needs.

14 To end, let me express my thanks to the many companies who have shared your feedback and experiences on implementation the low sulphur limit come Jan 2020.  I would also like to thank the shipping community for your strong support to the Singapore Flag.  The Singapore Registry of Ships continues to maintain our position among the top five biggest registries in the world, and has performed well under the various Port State Control regimes.

15 Let me now pass the stage to Michael Phoon, who will be delivering the welcome speech.

16 Thank you and I wish all of you a fruitful seminar.