Asia/Pacific News
Fratelli Looking to Grow Singapore Volumes, Move into LNG Bunkering
Timothy Cosulich, managing director of Fratelli Cosulich (Fratelli) says the company is looking to grow its bunker volumes in Singapore, and expand into liquid natural gas (LNG) bunkering.
"In 2015, still with three barges, we're moving roughly 140,000 metric tonnes (mt) of fuel per month and the need has emerged for a fourth barge," said Cosulich.
"We are now looking to increase our volumes from roughly 140,000 mt to roughly 200,000 mt a month."
Fratelli, ranked 40th for sales by volume in 2014 by the Maritime and Port Authority of Singapore (MPA), is said to have already made an offer on a second-hand bunker tanker, though it is monitoring the chartering market in order to make the best choice.
Diversifying into LNG bunkering will happen further down the line, says Cosulich, with the timeline dictated mainly by the energy majors.
"Roughly 60 percent to 70 percent of our volumes are actually done on behalf of oil majors. So, if any of the oil majors - and probably they will - decide to go into LNG, we will definitely be open to getting into it with that," he said.
The global bunker supplier is also looking to outfit its barge fleet with mass flow metering systems (MFMs) ahead of their mandatory use for HFO bunkering in Singapore from January 1, 2017.
Work is set to be completed on the first of its three barges by the end of this year, while installations on the remaining two are set to be completed during the middle of 2016 pending the addition of the new barge.
"We'll decide whether to bring forward one of the installations depending on when we get the fourth barge," said Cosulich.
"From an operational point of view, it will be difficult to have just one barge with a flow meter and two without, or three without."
The Cost of MFMs
Some in the market have argued that the installation of MFMs would drive up bunker costs, although Simon Neo last year told Ship & Bunker that adding a premium of just $1 per mt (pmt) to bunker prices will allow Singapore's suppliers to recover their installation costs in around six months.
Cosulich says he has observed existing MFM equipped barges with "very low" premiums of $5 pmt above ex-wharf cargo prices, and argues that they need to be higher.
"That does not allow the barge operators to actually cover their costs," he said, adding that the low prices might come at the expense of lower service.
"There're a lot of competitors that are not particularly reliable. Because of this lack of reliability, they can also afford to be particularly aggressive on the prices they offer."
Ultimately, Cosulich hopes that the market will adjust to a point where barge operators are remunerated for the service they provide.
"In Singapore, a main challenge is to be competitive and at the same time able to maintain a reputation and not jeopardising it by providing a substandard service," he said.
In March Ship & Bunker reported that the MPA was looking to mandate the use of mass-flow meters (MFMs) for MGO in addition to already announced pans for their use with marine fuel oil (MFO).
