Distinguished Guests,

Ladies and Gentlemen,

Good morning, and to our overseas guests, a warm welcome to Singapore. I am pleased to join you for the opening of the 17th Singapore International Bunkering Conference and Exhibition, or SIBCON, as it is commonly known. Since its inception in 1988, SIBCON has grown to become the premier forum for the global bunkering industry. This year’s record gathering of over 1500 participants from some 50 countries affirms SIBCON’s standing as the world’s largest bunkering conference.
 
SUSTAINABLE SOLUTIONS FOR MARINE FUELS

2 The bunkering industry is facing a challenging environment. Globally, economies are constrained by inflationary pressure, demands for fiscal austerity, or an anaemic recovery from the financial crises. Trade flows have slowed. Capital investment is curtailed. Consumption is reduced. This has resulted in decreased demand for shipping.

3 High bunker prices mean that it now usually accounts for over 50% of the operating costs for a vessel. This has forced shipping lines to closely manage their fuel costs as it has a major bearing on the performance of every shipping company. With shipping lines adopting slow steaming to cut costs and manage the oversupply in capacity, bunker suppliers are finding their bottom lines affected as well.

4 Going forward, the industry will have to contend with several key fuel-related issues. First, we have to contend with Emission Control Area regulations and new sulphur content rules. While the 1% sulphur content limit is thought to be manageable from a supply perspective, the 0.1% limit will introduce additional supply and cost concerns. Second, there is a need to prepare adequately for the technical challenge of fuel switching. This requires well-trained crews, stringent operating procedures and properly configured fuel systems. Failure to do so entail operational risks like propulsion incidents in confined waters, unplanned downtime and engine damage. Third, given the new content rules, the industry will need, for example, to look more closely at Liquefied Natural Gas, or LNG, distillates and abatement technologies. With all three, as is the case with other possibilities, we need to think carefully about cost-related issues, supply network and infrastructure including onboard retrofitting.

5 Against this backdrop, it is fitting that the theme for this year’s SIBCON is “Achieving Sustainable Solutions for Marine Fuels”. I understand that the conference will take a close look at developing marine fuels that can promote cost-effective growth while minimising the environmental impact, in particular, the use of alternative fuels such as LNG and how this can be supplied and regulated.

6 In this regard, the Maritime and Port Authority of Singapore (MPA) co-funded a joint industry project that brought together a consortium of 21 industry players to study the operational feasibility of LNG bunkering in the Port of Singapore, in January this year. MPA will share more details later in the conference. It will be a useful opportunity to exchange views on this issue, and to see how best to take this possibility forward.

SINGAPORE - WORLD’S TOP BUNKERING PORT

7 Despite the weak market conditions, bunker sales in Singapore have continued to grow. In 2011, our bunker sales grew 5.6% to reach a record 43.2 million tonnes. In the first nine months of this year, the Port of Singapore sold a total of almost 32.3 million tonnes of bunkers, a marginal increase from the same period in 2011.

8 For Singapore to maintain its position as the world’s premier location for bunkering, it is imperative that Government and industry work together to ensure both the quality and quantity of fuel delivered in our port. Let me share with you some joint MPA-industry initiatives.
 
ENSURING QUALITY BUNKERING OPERATIONS IN SINGAPORE

Singapore Standard Code of Practice for Bunkering

9 The Singapore Standard Code of Practice for Bunkering, or SS 600 as it is more commonly known, provides a reliable and transparent framework for bunkering operations. MPA requires all bunker deliveries in the Port of Singapore to adhere to SS 600, which sets out best practices for documentation, equipment requirements and procedures. There are also independent bunker surveyors who ensure that bunker sales are fair.

Frothed Bunkers 

10 While these safeguards are effective, there are still the occasional disputes over the quantity or quality of the bunker deliveries. These cases are rare but we take a serious view of any transgressions and will spare no effort to maintain the integrity of bunkering operations in Singapore.

11 Like in other ports, we too face claims about frothed bunkers being delivered in Singapore. We absolutely do not condone such activities. MPA will investigate every case thoroughly and will not hesitate to take action against suppliers of frothed bunkers, which could include suspension or cancellation of their bunker supplier licences.

Information Sheet on Bunker Suppliers

12 Another useful initiative is MPA’s publication of an information sheet on all licensed bunker suppliers in Singapore that shows their technical performance and value propositions. Shipowners can refer to this information sheet on MPA’s website to help them make more informed choices of bunker suppliers.

Implementation of Mass Flow Metering

13 To improve operational efficiency and enhance transparency in bunkering operations, MPA had set aside S$1 million since the last SIBCON to support research and development into mass flow meters for bunkering operations. I am pleased to note that the first commercial bunker delivery in Singapore using the mass flow metering system took place in July this year. This was well-received by industry stakeholders and I am encouraged by its growing usage. MPA has also developed an Industry Guide for the Mass Flow Metering System. I encourage all suppliers and consumers to refer to this Guide as you consider adopting mass flow metering to improve the accuracy of your bunker deliveries in Singapore.

14 These are but a few of the measures towards enhanced performance standards and greater professionalism in the bunkering industry. The introduction of new regulations, some of which are not so easily understood and applied, mean that fuel suppliers can contribute significantly by helping ship owners and managers manage risks and reduce costs. You can serve as trusted counsels on issues related to fuel procurement strategies and on commercial and operational issues related to marine fuels. In this new paradigm, a nimble and forward-looking fuel supplier can value-add immensely and develop new business niches.

Conclusion

15 Ladies and gentlemen, these are difficult times for the shipping and bunkering industries. MPA and the industry must continue to work closely together to meet the challenges head-on. SIBCON provides a platform for all of us to come together to discuss these challenges and the opportunities they offer, and to explore solutions and strengthen partnerships.

16 On this note, it gives me great pleasure to declare SIBCON 2012 open. I wish everyone a fruitful conference.

17 Thank you.