Bunker Fuel Quality Management Today & Tomorrow

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Priscilla O’Neal’
5 years ago
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1 Bunker Fuel Quality Management Today & Tomorrow Ian Workman Account Manager VPS Testing & Inspection Inc

2 Over the past decade evolving Environmental Legislation has had more impact on fuel quality than any other potential cause or effect. Decreasing Sulphur Limits have resulted in Spikes of Off-specification fuel Immediately Before & Immediately After every Legislative Change: Baltic ECA May % North Sea ECA Nov % ECA Drop Jul % Global Cap Drop Jan % Ameri can ECA Aug % ECA Drop Jan % Global Cap Drop Jan % Decreasing sulphur limits have led to The development of new fuel types & grades, new lubricant oils Increased blending, greater use of cutter stocks, diluents & additives Greater awareness of the need for fuel management and monitoring of fuel quality, Causing increasing-rate of revisions of the Marine Fuel Quality Std (ISO8217)

The 2020 requirements could add annual total costs up to USD 30 billion for the container shipping industry.

3 The Financial Cost of Environmental Change? The International Transport Forum at the OECD stated: The TOTAL increase in container shipping costs due to the 2015 requirements amounted to USD 500 million. The 2020 requirements could add annual total costs up to USD 30 billion for the container shipping industry. Shipping line OOCL has joined other major container shipping companies in announcing plans for a bunker recovery charge as a result of the 2020 sulfur cap which is estimated to cost the shipping industry $60 billion each year. Forecasters are stating the price difference between Distillate and HFO could rise to $400/mt in A heavy increase in OPEX for anyone choosing the Distillate Fuel option!!

4 million barrels /day Industry Fuel Forecasters: 4.5 Global Marine Fuel Consumption HFO Distillate 3 million barrel/day switch from HFO to Distillate in 2020 Marine accounted for 45% of global demand for HFO in 2015 & 3% of global distillate demand. Marine will account for less than 25% of global HFO demand during 2020 & 10% of distillate demand.

5 Global Fuel Quality No. of Alerts No. of alerts Currently 15% of all residual fuels and 9% of all distillates fuels tested exceed the ISO8217 test specification by at least one parameter. In 2017 VPS released 58 Bunker Alerts of which 36 (62%) were related to Residual fuel & 22(38%) related to Distillate fuel quality. Which was a 70% increase over 2016 Distillate Bunker Alerts and 30% increase over 2016 Residual Bunker Alerts. In 2017: There were more fuel issues in Europe & Americas than AMEA. H1-2018: 33 Bunker Alerts 18 x Residual (55%), 15 x Distillate (45%) 14 x Americas, 13 x Europe, 6 x AMEA Key Parameters, Contaminants, Cat-Fines, FP VPS Bunker Alerts by Test Parameter Residual Distillate VPS Bunker Alert Volumes by Region Residual Distillate Residual Distillate Residual Distillate Residual Distillate Q1 Q1 Q2 Q2 Q3 Q3 Q4 Q4 Americas Europe Middle East Asia

6 Fuel Choice Decisions? The choice of available marine fuels is now greater than ever and will only increase: ISO8217:2017 Distillates DMA, DFA, DMB, DFB, DMX, DMZ, DFZ ISO8217:2017 Residuals RMA10, RMB30, RMD80, RME180, RMG180, RMG380, RMG500, RMG700, RMK380, RMK500, RMK700 Other Fuels: ULSFOs Hybrids eg HDME50 LNG Methane, Ethane, Propane Methanol, Ethanol 100% Bio-fuel Other Power Sources: Solar Wind Fuel Cells

7 Residual Fuels At present Residual fuels remain the largest volume fuel products used on board. Therefore generates the largest number of technical issues on ships Following the demise of 1.0% m/m Sulphur residual fuels(end of 2014), HFO quality improved due to reduced blending. But since 2016 there has been a continuing rise in quality issues. From 2020, HFO demand will dramatically decrease, but to what level will be influenced by the degree of Residual/Distillate Blending & take up of scrubber technology. Whatever the level, the current fuel management issues will still be relevant Therefore all ISO8217 Parameters will still require monitoring. Currently 15% of Residual Fuels tested exceed the specification of at least one ISO8217 test parameter Fuels may achieve the ISO8217 Specifications, but can still cause operational problems, due to the presence of materials not specifically covered by ISO8217. VPS are pioneers and leaders of additional testing services from both a pre & post-burn perspective. Such additional testing and operational advice, provides ship owners and operators with more detailed information regarding their fuel allowing them to take the necessary fuel management actions required to protect their assets.

Forensic Detection of Fuel Contaminants The increase in Number & Types of Fuel in 2020 will see a wider use of Diluents, Cutter Stocks, Additives, Blending.

Original Fuel source and refining also influences fuel quality: Eg Crude type and region, Shale Oil, Tall Oil There will be an increase in fuel quality issues.

8 Forensic Detection of Fuel Contaminants The increase in Number & Types of Fuel in 2020 will see a wider use of Diluents, Cutter Stocks, Additives, Blending. All the above can alter the fuels chemistry, and have a potential destabilising effect, or damaging side-effects. Original Fuel source and refining also influences fuel quality: Eg Crude type and region, Shale Oil, Tall Oil There will be an increase in fuel quality issues. Estimated Average Cost of each fuel Mgmt issue = $300K Laboratories are now using many high-end analytical techniques and methods to identify the cause of fuel problems: Gas Chromatography- Mass Spectrometry (GCMS): Chemical Screening, Extended Head-Space, Acid Extraction, Vacuum distillation, DI. Fourier Transform Infrared (FTIR), Solids contamination, Polymers Microscopy Solids and polymer identification Separability No., Reserve Stability No. (RSN) Compliment TSP/TSA/TSE CHNO Analysis (Carbon, Hydrogen, Nitrogen, Oxygen) Steel Corrosion

9 Where Do Contaminants Come From? Fuel Blending Cutter Stocks to achieve Sulphur specifications Shale Oil FAME Bio-Materials Automotive fuels Heating Fuels FAME Bio-Waste Cross-contamination Fuel Supply Chain Adulteration Waste Chemical Disposal

Potential Fuel Contaminants Chemical Group Comment CHLORINATED HYDROCARBONS ALDEHYDE Chlorinated hydrocarbons do not originate from any refinery processes and are therefore an indication that the

Aldehydes do not originate from normal petroleum refining and are therefore an indication that the ALCOHOL Alcohol does not originate from normal petroleum refining.

STYRENES TERPENES CYCLOPENTADIENE PHENOLS KETONES Styrenes do not originate from normal petroleum refining but are known to be present in some blend stocks for fuel oils.

10 Potential Fuel Contaminants Chemical Group Comment CHLORINATED HYDROCARBONS ALDEHYDE Chlorinated hydrocarbons do not originate from any refinery processes and are therefore an indication that the fuel is possibly contaminated. Based on VPS experience, these contaminants may result in damages to fuel injection equipment. Aldehydes do not originate from normal petroleum refining and are therefore an indication that the fuel is possibly contaminated. Based on VPS experience, these contaminants may result in damages to fuel injection equipment. ALCOHOL Alcohol does not originate from normal petroleum refining. Based on VPS experience, these contaminants may result in increased sludge formation and possibly laquering and/or deposit formation. STYRENES TERPENES CYCLOPENTADIENE PHENOLS KETONES Styrenes do not originate from normal petroleum refining but are known to be present in some blend stocks for fuel oils. Based on VPS experience, these contaminants may result in increased sludge formation and possibly laquering and/or deposit formation. Terpenes do not originate from any refinery processes and are therefore an indication that the fuel is possibly contaminated. Based on VPS experience, these contaminants may result in increased sludge formation and /or damages to fuel injection equipment. DCPD does not originate from normal petroleum refining but are known to be present in some blend stocks for fuel oils. Based on VPS experience, these contaminants may result in increased sludge formation and possibly laquering and/or deposit formation. Phenols do not originate from normal petroleum refining. Based on VPS experience, these contaminants may result in increased sludge formation and /or damages to fuel injection equipment. Ketones do not originate from any refinery processes and are therefore an indication that the fuel is possibly contaminated. Based on VPS experience, these contaminants may result in damages to fuel injection equipment.

11 Quality Issues - HOUSTON Jan-May of this year saw over 100 vessels suffered fuel pump failure issues from fuel supplied in Houston VPS investigated fuel-pump failures for 50 vessels on our testing programme!! VPS Bunker Alerts were released, 26 th April, 29 th May, 25 th June. The contaminated fuel is not single supplier specific. 10 suppliers 20 Delivery Barges Indications suggest Upstream somewhere between Refinery but before final supplier? VPS: the first testing company to identify the cause. 4-Cumyl Phenol found in over 40 samples from Houston bunkered fuel. Concentration range ppm. It was detected by VPS In-house proprietary method utilising Acid Extraction/Gas Chromatography Mass Spectrometry. Findings were Verified in two VPS laboratories (Singapore & Fujairah) Verified 4-cumyl phenol only seen in Houston fuels. 4-cumyl phenol is used to manufacture resins and emulsifiers due to its sticky properties. Phenolic compounds have been found in fuel since All resulted in sticking fuel pumps.

12 Other Quality Issues Gulf of Mexico Corpus Christi Sludging of Fuel/filter blocking 4 vessels with Petroleum Coke contamination Panama Poly-methacrylate found in fuel via solids contamination analysis, causing sticking fuel pumps. Plus 20 vessels affected by Houston-type contaminants Singapore 10 vessels affected by Houston-type contaminants Are these cases a sign of quality issues to come before and after 2020?

13 ME HP Pump Suction DG NO3, UNIT NO2 ME HP PUMP PISTON

Distillate Fuel Quality The perception has been, Distillates are Problem Free?

Currently 9% of all distillates fuels tested exceed the ISO8217 test specification for at

Fuel Change-over issues Low viscosity issues Hydro-desulphurisation Decreased Lubricity

14 Distillate Fuel Quality The perception has been, Distillates are Problem Free??? Not All Distillates are Low in Sulphur and require some degree of treatment. Currently 9% of all distillates fuels tested exceed the ISO8217 test specification for at least one parameter. Fuel Change-over issues Low viscosity issues Hydro-desulphurisation Decreased Lubricity Reduced Stability Wax Precipitation due to Cold-flow properties Low Flash Point FAME Microbial contamination Distillate quality problems are becoming much more common with increased demand.

15 ULSFO/Hybrids The principle purpose of these new grades was to provide a fuel that met the ECA sulfur limit but had a relatively high viscosity, overcoming the potential risks associated with very low viscosity gas oils A significant characteristic of some of these new ECA fuels is that the cold flow properties, stability and compatibility, could present a challenge on some ships. Like New ECA fuels these could be Blended products (ULS distillates + LS residues) Hydro treated vacuum gas oils Hydrocracker fractionator bottoms Blending residual components with proportions of distillates could result in Reserve Stability issues and sludging. Possible Operational Issues: Avoid mixing with any other fuel in storage tanks / Use empty tanks or ensure tanks are drained as much as possible before loading a new fuel/ Ensure heating requirements are feasible for the vessel / New fuel should not be used before analysis results are known.

16 Testing Recommendations Residual Fuels ISO8217:2010/12,17 Chemical Screening (GCMS-HS) Separability Number (RSN) TSA/TSE Asphaltenes Fuel System Checks Distillate Fuels ISO8217:2010/12,17 Cold-Flow (CP, CFPP) Lubricity (Sulphur<500ppm) FTIR Bio/FAME Emergency Equipment Testing VLSFO s/ulsfo s Since 2015 tested to RMD80 spec. Depends upon constituent make-up of fuel. Can be a mix of the Residual & Distillate tests Compatibility & stability always a concern. No ISO8217 Specification at present

ISO-8217:2017 Edition 5.2 The fuel shall be free from any material at a concentration that causes the fuel to be unacceptable for use in accordance with Clause 1 (i.e. material not at a concentration that is harmful to personnel, jeopardizes the safety of the ship, or adversely affects the performance of the machinery).

17 ISO-8217:2017 Edition 5.2 The fuel shall be free from any material at a concentration that causes the fuel to be unacceptable for use in accordance with Clause 1 (i.e. material not at a concentration that is harmful to personnel, jeopardizes the safety of the ship, or adversely affects the performance of the machinery). Your shield against chemically contaminated fuels. Review Your Purchasing Contract Terms and Language

18 2020-Lubricant Oil Considerations Two fluids go into an engine: Fuel & Lubricating oil Therefore its important to monitor the quality and condition of both to avoid Damage S in fuel can form SO 2 & SO 3 during combustion. H 2 O within the scavenging air and the combustion process reacts to form H 2 SO 4. Important to monitor/control any damaging effects of acidity and alkalinity. Most modern 2-stroke engines designed for operation on HSFO. Cylinder oil used must have a high enough base number to neutralize the acidity. If the acid is not neutralised, corrosion of iron will occur and this is the primary cause of corrosive wear for liners and piston rings. Conversely using ULSFO produces less H 2 SO 4 during the combustion process. If BN of cylinder oil is too high, the oil could be too alkaline then compounds can be formed which may also cause damage. Alkaline deposits on piston crowns can damage oil film between the piston ring and liner, leading to scuffing and seizures. Also deposits form between the piston rings & pistons, preventing free movement of piston rings and increased liner wear.

19 Summary So Heading towards 2020 & Beyond Fuel Management Challenges will increase and become more complex. We are already seeing a major rise in fuel quality issues, which will only continue. Wider range/choice of fuels available with many technical considerations. The choice of fuel will have many financial implications and considerations. Key factors will be Availability & Price, Supply & Demand Lubricating Oil choice will also affect operations. Fuel and Lubricant quality & condition should be monitored in parallel. Every fuel type has its pro s & con s Work with a Fuel & Oil Management Partner to effectively measure and monitor fuel & lube quality, to improve operational efficiency, protect your assets, comply with legislation and ultimately save money!!

20 Thank you for your attention! YOUR FUEL MANAGEMENT PARTNER Questions?? Please drop me an

Bunker Fuel Quality: 2020 Outlook North of England P&I Athens, November

Bunker Fuel Quality: 2020 Outlook North of England P&I Athens, November 2018 24 Options for 2020 Compliance After 1 st of January 2020, a fuel with Sulphur content in excess of 0.50% will be regarded as