Earlier this year saw the launch of a new bunkering venture in Iraq. Bunkerspot caught up with Al-Iraqia Shipping Services & Oil Trading’s (AISSOT) Bunkering Director, Praveen Jaiswal, to find out more about the company.
Bunkerspot: Why did Iraqi Oil Tankers Company (IOTC) and Arab Maritime Petroleum Transport Company (AMPTC) decide to partner?
Praveen Jaiswal: Both IOTC and AMPTC are primarily shipping companies, more so in the shipping of petroleum products, hence there was a synergy between them to enter shipping and bunkering. Furthermore, it’s an Iraq Government initiative to develop shipping and port infrastructure in Iraq which will strengthen the Iraqi economy and generate more jobs for Iraqi people.
Primarily, the company has been formed with six major verticals, one of which is, of course, bunkering. There has not been any major bunkering activity in Iraq. On 17 September, we commenced our first supply of bunkers. We have two bunker barges, and we are supplying fuel oil and low sulphur gasoil bunkers which meet the ISO 8217:2010 specification.
To facilitate our trading operations we have also stationed a 300,000 tonne-capacity VLCC [very large crude carrier] in Basra which is transporting fuel from different ports in Iraq. This vessel is also used to store around 50,000 tonnes of our bunker fuel. The rest of the capacity is used for other cargo trading activities.
Bunkerspot: Iraqi ports are in close proximity to the world’s second-largest bunker port; Fujairah. How are you going to compete?
PJ: Iraq is the second-largest exporter of crude oil in the Middle East after Saudi Arabia and there are between 10 and 12 VLCCs sailing off the coast. The Iraqi economy is also growing at a rate of 4%-5%, so we’re seeing a lot of trade activity and a lot of marine traffic in the area. In the Persian Gulf, you have Kuwait, Iran, Saudi Arabia and Qatar but bunker facilities are not always available, so shipowners have no choice but to go to Fujairah to lift bunkers.
Now we have come up with an alternative with, I would say, equal and better facilities and services. We’re giving a chance to shipowners to take on bunkers in Iraq whilst they load or discharge cargo and go straight on their voyage without having to stop off at Fujairah. In Fujairah there is a diversion of close to two hours and there can also be a lot of congestion at times.
Bunkerspot: Will you be able to compete with Fujairah on price?
PJ: The services we are offering are equal or better and the fuel oil prices we are offering in Iraq are around $7 per metric tonne lower than the prices in Fujairah. So, unless these vessels have another job at Fujairah, they need not go there for bunkers. That is the USP [unique selling proposition] that we are trying to promote to our customers.
Also, because of certain draft restrictions at Basra, VLCCs try to take bunkers after they have completed their operations and there is a wait of 8-10 hours for these vessels for paperwork formalities. This time can be better utilised by bunkering. From the owner or charterer’s perspective it is a ‘win-win’ because they don’t need to divert to Fujairah. There are lower waiting times [in Iraq] and these vessels can take on bunkers before, during or after they load and discharge.
Another advantage is that there are no charges for bunker calls in Iraqi ports and customers do not need to use agencies because we are self-staffed and our fees are included in the bunker costs. So, there are a lot of savings which we are offering to the customers which will, of course, be translated into a lot of financial benefit for the owners and charterers.
Bunkerspot: Compared to the neighbouring countries, Iraq’s coast is relatively small. Could you elaborate on the geography of the country?
PJ: There is only one inlet and one outlet. All the vessels have to either go to Basra [via the Shatt-Al-Arab waterway] or to Khor Al-Zubair and Umm Qasr [via the Khawr Abd Allah Estuary]. Basra is the most natural and favourable region for bunkering because, eventually, all vessels heading north will pass through here. It is the safest and the most convenient location for bunkering, and is why we have stationed our bunker vessels there.
Bunkerspot: How many barges do you operate?
PJ: We have two barges which are both Sire-approved and Shell-approved. One of the barges is the Ithaki which is being chartered from Aegean. The other vessel is the GP B3, which is owned by GP B3 Shipping. Both of these barges were operating in Fujairah and we have taken them on time charter.
Bunkerspot: Upon its arrival to the market AISSOT said it was aiming to achieve a bunker sales volume of 200,000 mt. Is this still the case?
PJ: There is a lot of traffic in the area. We share borders with Kuwait and Iran. There is a lot marine traffic in that area and these vessels are having to bunker in Fujairah. We are getting a lot of enquiries. For example, from Kuwait to Basra, it is only an hour and a half, so when the vessels have completed their operations in Kuwait, they are coming to Basra for bunkers.
Around 10-12 VLCCs are calling at Iraqi ports on a daily basis and these vessels take between 3,000 and 5,000 mt at a time, so we see a huge potential for bunker fuel.