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What to watch out for in Singapore, the Middle East and Asia in 2019

Mon 17 Dec 2018 by Ed Martin

What to watch out for in Singapore, the Middle East and Asia in 2019

As the world’s largest bunkering hub, issues surrounding 2020 compliance will unsurprisingly loom large in Singapore in 2019.

At the Singapore International Bunkering Conference in October, the country’s senior minister of state at the Ministry of Transport and Ministry of Health, Dr Lam Pin Min revealed progress on the port’s LNG bunkering goals as well as providing updates on low-sulphur and alternative fuels.

The MPA’s controversial decision to ban operation of open-loop scrubbers in the port when the 2020 cap comes into effect is also a hot topic as 2018 ends and 2019 begins.

The southeast Asian city-state's digital transformation will continue to figure prominently with the maritime sector no exception. Dr Lam has called on Singapore’s maritime cluster to come together and look to innovative digital solutions to challenges posed by issues such as IMO’s 2030 carbon limit.

Elsewhere in Asia, it remains to be seen how the defeat of the Democratic Progressive Party in Taiwan’s local elections will affect the country’s energy strategy. Taiwan is seen as the world’s leading export market for offshore wind and commentators have pointed out a slowdown in the rate of nuclear decommissioning and buildout of wind as a replacement are possibilities with the shift in power toward the Kuomintang party.

And the status of the offshore oil and gas sector in the Middle East as an offshore 'bright spot' for the OSV market will be an interesting consideration. The region was highlighted as an area that had experienced an uptick in new tendering and rig activity in early 2018 and increased demand for OSVs is a possibility.


Preparations for 2020 compliance continue apace

Sulphur cap compliance strategies and how Singapore can meet the challenges these bring will remain a key issue in 2019.

Speaking at the 20th annual Singapore International Bunkering Conference in October, the country’s senior minister of state at the Ministry of Transport and Ministry of Health Dr Lam Pin Min announced that the Maritime and Port Authority (MPA) will be making a list of licensed bunker suppliers of compliant low-sulphur fuels available by mid-2019.

Dr Lam added that MPA has allocated S$5M (US$3.6M) of funding under its Green Energy Programme to support the development of cleaner alternative fuels, such as biofuels and methanol. “Companies can tap on the fund to conduct research and development in alternative fuels to meet future greenhouse gas emissions regulations,” he said.

On the topic of scrubbers, Singapore’s MPA announced on 30 November it would ban discharge of washwater associated with open-loop exhaust gas cleaning systems as soon as the IMO-mandated cap takes effect.

Scrubber advocacy organisation Exhaust Gas Cleaning Systems Association took issue with the way Singapore made its decision, saying in a statement "The MPA provided neither scientific evidence for its decision nor was the industry invited to consultation. If there had been discussion, the Singapore MPA might have realised the high risks to human health resulting from the high toxicity of low sulphur fuels and more toxic distillates if no exhaust gas cleaning systems are used."

Singapore outlines LNG bunkering commitment

SIBCON also saw Singapore’s commitment to LNG bunkering highlighted.

MPA disclosed at the event in October that the port is adopting several pro-LNG measures including expanding the LNG bunkering focus group from the original three members in 2014 to 11, the latest member to join being the Suez Canal Economic Zone Authority. The authority also recently joined the Sea\LNG coalition that aims to increase the global supply chain for the fuel as the association’s third port member, alongside the Port of Rotterdam and Yokohama-Kawasaki International Port Corp. 

As concerns over the ability of the bunkering industry to store enough LNG are settled by the promise of ports such as Singapore to be ready for 2020, more shipowners are attracted to LNG or dual-fuelled engines, particularly as the price of oil rose during 2018.

The first LNG bunker vessel (LNGBV) for operation in Singapore waters has now been ordered. In June FueLNG, a joint venture between Keppel Offshore & Marine and Shell Eastern Petroleum, contracted a 7,500-m3 LNGBV at the Keppel Singmarine yard in China.


Ongoing digital transformation in anticipation of future challenges

Singapore will continue to to be affected by, and embrace, the digital transformation in order to meet the changing nature of shipping and the threats it faces.

Dr Lam made this clear in his remarks at SIBCON, saying “With the impending global sulphur limit and IMO’s commitment to halve carbon emissions by 2050, the bunker industry in Singapore is at an inflexion point.”

“We therefore have to come together to chart the way forward in an operating environment enabled by digitalisation, automation and the internet of things.”

This view was shared at the Maritime Digital Innovation Summit on 14 and 15 November, with Association of Singapore Marine Industries president Abu Bakar Mohd Nor reflecting on the downturn and saying “While we see positive signs, we cannot just rely on business as usual.”

“Industry must seize more opportunities, especially in the area of innovation and capability improvement.”

Singapore’s embracing of the digital transformation is drawing major players to establish operations focused on digital and cyber security there. In October, Wärtsilä announced the opening of an International Maritime Cyber Centre of Excellence (IMCCE) in Singapore, comprising a Maritime Cyber Emergency Response Team and a cyber academy.

Founded in partnership with Templar Executives, the IMCCE, which is the first institution of its kind in the world, is intended to provide a focal point for the industry to drive cyber awareness and provide a response to cyber incidents.

Explaining the choice to locate the IMCCE in Singapore, Wärtsilä’s vice president for cyber security Mark Milford said “It’s a country that is forward-leaning in cyber development and a very important location in the maritime ecosystem.”


‘Crushing defeat’ could affect later Taiwanese offshore wind projects

The resignation of Taiwanese president Tsai Ing-wen as head of the Democratic Progressive Party following a ‘crushing defeat’ in November could have an impact on support for offshore wind projects in the country.

Under the president, Taiwan has been making good on longstanding plans to close nuclear power plants and invest heavily in offshore wind energy. Late April 2018 saw the authorities announce the results of the first large-scale auction for offshore wind in the country. The president has proposed to end the country’s dependence on nuclear power by 2025 while sourcing 20% of Taiwan’s electricity from renewable sources, five times the level in 2015.

Natixis Corporate & Investment Bank managing director Ranjan Moulik told the Offshore Wind Europe 2018 conference in London on 27 November 2018, that for developers, the political situation in Taiwan could be “challenging” because of the two-party system. He told delegates that policy changes were not out of the question as a result of the dramatic shift in sentiment among voters in the local elections.

“It’s possible that we could see a slowdown in the rate at which nuclear power is decommissioned,” he told the conference. “In turn, that could affect the rate of rollout of renewable energy.” Nuclear power and the rate at which it should be decommissioned was one of a number of referendum questions posed to the electorate at the same time as the local elections.  


‘Resilient’ Middle East is OSV bright spot

Speaking at the Middle East Offshore Support Journal Conference in May, Westwood Global Energy Group director Thom Payne highlighted the Middle East as “the global bright spot” for the OSV sector.

Speaking in the conference’s opening session, Mr Payne told the gathering that the uptake in oil prices is yet to resonate to the offshore marine sector.

“We are starting to see a greater volume of offshore drilling projects being sanctioned around the world, but drilling will not start for another 18 to 24 months, so we are still a little bit off from seeing that big meaningful recovery in global rig counts,” he said. The exception is the Middle East, which has proved a resilient market and over the past few months has experienced an uptick in new tendering and rig activity.

“We expect that uptick to continue over the next one to three years,” said Mr Payne, adding “there are certainly very ambitious plans in place across most Middle East countries in terms of new field development. We expect [this] to translate into increased demand for jack ups and subsequently increased demand for OSVs.”

The 2019 edition of the conference will take place in Dubai from 24-25 April.

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