Singaporean ruling on port limits draws mixed reactions

Singaporean ruling on port limits draws mixed reactions

SINGAPORE (Reuter): A move by Singapore to extends its port
limits will help curb ship refueling in open seas, some oil
traders said yesterday.

However, others said the action could well turn business away
and hinder the island's lucrative bunkering business.

Industry sources said on Wednesday that Singapore extended its
official port limits, partly to try to draw bunker trade back
within port limits.

The sources said the Maritime and Port Authority of Singapore
(MPA) brought new port limits on its southern and eastern
seaboards came into operation July 11 and that shippers were
informed on July 25.

"This will definitely help bunkering within the Singapore port
limits," said a major bunker supplier.

"Those who are doing off-port-limits (OPL) bunkering will be
forced to enter the port for bunkering. This is bringing back
Singapore's image for credibility and quality," said the
supplier.

Singapore authorities have no jurisdiction over the grey OPL
market. Bunkering is not illegal off port limits, but it means
there is greater risk on quality and quantity, shippers said.

MPA declined to elaborate on the new boundaries but a bunker
trader said he estimated the widening of the port limit
represented a three-mile southward extension of the port limits
off the island's southeastern and eastern coast.

The port limit was extended by one mile south on the south
western seaboard, the trader said.

The movement squeezes the open seas space between the port
limits and the traffic separation zone -- the highway for
shipping.

Singapore is one of the world's biggest bunkering ports and
has encouraged ship owners to refuel in the port to ensure
quality and quantity. But many buyers opt for the OPL market to
avoid paying port dues as save on docking time.

Official data showed that Singapore's bunker sales totaled
16.9 million tons in 1996, a three percent drop from 1995.

But the volume of bunkering carried out in the OPL market
doubled in 1996 to three million tons, industry sources
estimated.

MPA's move followed news earlier in July that Indonesian
authorities had boarded several tankers refueling outside
Singapore port limits.

The Indonesian action has reduced OPL trade and industry
sources said Singapore might have reached an understanding with
Jakarta to cut back OPL trade.

"Then both countries will benefit, with more bunker sales and
port dues," said a long-time market watcher.

However, some traders involved in the OPL trade cautioned
whether the move would significantly help in-port bunkering.

"They've been trying hard to curb the OPL trade without much
success in the past," one OPL trader said.

"Ship owners can always find cheaper bunker fuel elsewhere,"
he said, referring to cheaper port charges and bunker fuel prices
elsewhere in Asia.

"We can always change the location. There should still be some
area where we can do this," said one bunker supplier.

"Ship owners used to the OPL bunkering may just turn away to
other countries. They think they are luring business into the
Singapore port but actually they are pushing business away from
Singapore," another OPL bunker supplier said.