Glencore Singapore’s Bunkering License Suspended

The Maritime and Port Authority of Singapore (“MPA”) issued a press release on 3 August 2022, advising that it was suspending Glencore Singapore Pte Ltd’s (“Glencore”) bunkering licence for two months, due to Glencore’s part in the well-publicised spate of off-spec bunkers claims which arose out of supplies of HSFO at Singapore in March & April this year. The full press release can be accessed here: MPA completes its investigations into bunker fuel contamination in Singapore port | Maritime and Port Authority of Singapore.

The MPA reportedly considered such enforcement action necessary, after its investigations showed that Glencore had continued supplying fuel from the batch in question for a number of days after analysis results had revealed high concentrations of Chlorinated Organic Compounds (“COCs”) in the fuel.

Interestingly, whilst PetroChina International (Singapore) Pte Ltd (“PetroChina”) was also in possession of fuel from the same batch of HSFO, the MPA found that PetroChina had stopped delivering the fuel after its own test results had indicated a problem.  As such, the MPA concluded that no enforcement action was necessary against PetroChina.

Press reports suggest that in total more than 60 Vessels received supplies of the HSFO in question, including a number of Nordisk Members. It is understood that in some cases the consequences of consuming the fuel were extremely serious, including several reports of “dead ships”, potentially resulting in significant claims.

The above issues are clearly extremely concerning for shipowners & charterers, particularly as they suggest that the notorious spate of Houston bunker claims back in 2018 may not have been an isolated incident.

Going forwards, Members are therefore advise to continue taking a robust approach to claims prevention, including putting in place your own fuel testing programmes.

In addition, Members need to remain mindful of potential claims when agreeing the terms for any bunker supply contracts. Typically, bunker suppliers will favour incorporation of their own general terms and conditions, which often include (amongst other things) very strict time bar provisions and wide ranging exclusions from liability.  Clearly, it will be in Members’ interests to try to negotiate the incorporation of more balanced terms, such as the BIMCO Bunker Terms 2018.

As ever, in the event that Members do encounter FD&D claims arising from the supply of off-spec fuel, Nordisk will be more than happy to assist.