Cats that stop ships’ engines from purring: IUA/AAA experts outline a strategy for the fight back against corrosive fuel particles

Bunkering, Environment, Marine Insurance — By on March 31, 2013 at 10:08 PM
James Brewer

James Brewer

Cats that stop ships’ engines from purring: IUA/AAA experts outline a strategy for the fight back against corrosive fuel particles, By James Brewer

Tiny particles, often much finer than human hair, are causing damage in more and more marine engines, resulting in insurance claims ranging from $100, 000 to millions of dollars. Contaminating bunker fuel , catalytic fines, or “cat fines”  become embedded in cylinder linings. In a matter of weeks, they can cause wear to the engine that would normally take a year or more to be inflicted.

Cat fines originate from the process of catalytic cracking in crude oil refineries. As they are expensive, these hard compounds of aluminium and silicon may be re-used in extracting distillate fuels from stock. Small quantities – and deadly to ships’ engines – may be carried over with the residual fuel.

Large, slow speed main engines are most at risk, a market briefing organised by the International Underwriting Association and the Association of Average Adjusters was told.  The London vent was chaired by David Taylor, special advisor to the IUA and secretary of the Association of Average Adjusters.

David Taylor

David Taylor

The scene was set dramatically by Paul Hill, a marine engineer with Braemar incorporating the Salvage Association.

Human hair is 50 to 70 microns in diameter, fine beach sand is 90 microns, but cat fines are from 75 microns to just one micron. A micron is 0.001 of a millimeter.

The minute particles become embedded in engine components, especially cylinder linings and piston rings; and can affect smaller components like fuel pumps, injectors and valves. Mr Hill said that large, slow speed engines were in danger because their fuel injection components allowed ‘sizeable’ cat fine particles into the cylinders, and lubricating oil did not wash them away.

In medium and high speed engines, there was more copious lubrication of cylinders and the closer tolerance of components was a shield against particles.

Cat fines have been present in bunker fuel since the 1950s, but the 1973 ‘oil shock’  led to refiners squeezing more product from the crude stock, and in the first half of the 1980s problems attributed to cat fines began to be reported. Braemar SA, which has an important market share, was called to survey a dozen cases in 2012, twice as many as in the years 2009 and 2010.

Mr Hill said that this increase in incidence was explained by the demands of environmental legislation, and the commercial need for cheaper fuels. Increasing levels of cat fines would be seen as low sulphur content measures becoming ever stricter in order to cleanse air emissions from ships.  Ironically, to reduce sulphur levels, blends have to be produced which contain more of the menacing particles. Meanwhile, fuel has become denser which makes it harder for ships’ equipment to remove the highly abrasive particles.

Since 1982, the International Organisation for Standardisation has defined a quality standard for marine fuel oil. Main engine makers have specified a maximum of 15 parts per million cat fines, but refiners say that will cost the customers more, and argue that all ships should be able to deal with impurities by means of their fuel treatment systems.

Mr Hill said that there were problems, including the poor efficiency of purifiers that were the key part of the technical process, lack of knowledge on the part of ships’ engineers of bunker fuel quality, lack of maintenance, and inefficiency of purifiers installed by shipyards.  Ship superintendents should take every opportunity to inspect the inside of tanks, to ensure the residue was cleaned out.

All parties had a role in tackling the problem, and “all fuel received on board should be treated as if it contains cat fines, ” said Mr Hill.

The London Joint Hull Committee has recently formed a working group to address the concerns, and classification societies, regulatory bodies and engine makers were being consulted.

His worries were backed up by Paul Griffiths, senior partner at the law firm Bentley, Stokes and Lowless.  Mr Griffiths cited a case where a ship that used untested fuel for seven weeks suffered seven years’ worth of wear and tear.  He urged all concerned to pay special attention to the terms of charter parties. For instance, there was an important clause in Shelltime 4 which warranted that charterers would provide bunkers complying with ISO standard 8217. Owners should insist on charterers having some form of liability in place.

Time bars for taking action over suppliers’ contracts could be as little as six to 15 days. He urged particular caution over fuel sampling bottles, as their provenance could be doubtful. Owners should encourage a recognised testing programme.

Arbitration cases over the years had produced conflicting verdicts over the obligations of charterers. Disputes were “evidence heavy” – collecting the facts could be 80% of the costs involved. “The really important thing is to get first hand evidence, exactly what oil was supplied, where all the samples were taken – and do not leave them on board the ship, ” said Mr Griffiths. Evidence could be so ephemeral.

Keith Jones of Aon, current chairman of the Association of Average Adjusters, analysed the scope for claims on the insurance market.  He said that in one case that went to court, a ship had a leakage of hydrochloric acid on deck and that circumstance was allowed as part of a damage claim. Where a tank became unusable, “you would not have any problem with a claim for damage.”  He cautioned however that too much haste to get recovery from underwriters “might scupper your claim against a third party.”

Mr Jones said that the industry had become more aware of the issues over the last 10 years. Damage might build up over time, and heavy weather might add to the risk by agitating the bunkers.

While the London and other markets were conscious of the drive to keep claims costs down, it might be necessary in clarifying, for the average adjuster to appoint a consultant engineer. Generally speaking cat fines could be eliminated by the purification process, he said, underlining a theme of the day.

As to avoiding a claim, he thought that the due diligence proviso was “a bit of a blunt instrument” which he doubted would help.

More than one instance of damage attributed to cat fines would generally be seen as a continuing act of the same negligence; If there were multiple instances, “someone needs to pull the ship in  and have a thorough check.”

Damage might span a policy period, with different underwriters concerned, but only one deductible would apply if there was “a continuing act of the same negligence.”

Earlier Mr Taylor reported that the Association of Average Adjusters, which will have its annual meeting and dinner in London in May, was in “incredibly good shape” with many new associates from overseas successful in qualifying.

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