MPA suspends Glencore’s bunkering licence in S'pore over contaminated fuel

SINGAPORE - The Maritime and Port Authority of Singapore (MPA) will suspend Glencore’s bunkering licence for two months after the global commodity trading giant knowingly supplied contaminated fuel to ships at the Singapore port.

The suspension, which takes effect from Aug 18, comes after Glencore’s subsidiary in Singapore supplied tainted fuel to 24 ships in late March and early April. At least three of these vessels have reported issues with their fuel pumps and engines, said MPA on Wednesday (Aug 3). 

Investigations by the port authority showed that Glencore Singapore had sold the tainted oil even after the fuel testing laboratory that was contracted by it reported that the samples contained high levels of chlorinated organic compounds (COC), a component not commonly found in marine fuels. 

Bunker fuel contaminations have the potential to damage a ship’s engine and lead to costly repairs. Ships losing power at sea can be extremely dangerous, increasing the risk of collision or running aground.

The testing of the fuel samples was done between March 21 and March 23, said MPA.

Despite this, Glencore continued to supply bunkers blended with the contaminated fuel in the Port of Singapore from March 22 to April 1, noted MPA

It added: “Glencore contravened the terms and conditions of its bunkering licence in failing to ensure that no bunkers supplied by it were contaminated. Glencore was given the opportunity to comment on these findings before MPA finalised its conclusions.”

MPA said it has asked Glencore to improve its internal procedures “to ensure that prompt action is taken in future when it becomes aware of, or reasonably suspects, any irregularity in fuel quality”.

Glencore declined to comment when contacted by The Straits Times. 

Meanwhile, MPA will not be suspending the bunkering licence of PetroChina as it had stopped supplying the contaminated oil by March 19, as soon as it received the laboratory results showing extremely high levels of organic chlorides.

The issue first surfaced when about 200 ships that called at Singapore earlier this year were found to have received contaminated fuel supplied by Glencore and PetroChina International Singapore. About 80 of these ships reported issues with their fuel pumps and engines, MPA said in April.

Further investigations showed that the contaminated fuel originated from a tanker that loaded the oil from Khor Fakkan, a port in the United Arab Emirates, some time in January and February.

Hong Kong-listed Glencore had bought the oil from Straits Pinnacle, a unit of the Straits Financial Group, which is owned by Hong Kong logistics group CWT International.

Straits Pinnacle had, in turn, obtained the oil from Singapore firm Unicious Energy.

MPA also noted that it found no evidence that Glencore or PetroChina had intentionally contaminated the high sulphur fuel oil.

Mr Simon Neo, executive director of Singapore-based marine fuel consultancy SDE International, said the suspension did not come as a surprise, especially considering the contamination issue had affected Singapore’s reputation as a major ship refuelling hub.

“To be a top bunker port or bunkering hub, Singapore must maintain trust in the industry and this covers quantity and quality delivery to vessels,” he said.

“Glencore contravened the port authority’s licensing agreement that helps to ensure this trust is maintained by supplying quality fuel to ships coming to Singapore to refuel, and this was a consideration for the MPA in deciding on the suspension of the licence.”