World Bunkering > News > Summer 2010 > Spain

Bunker demand in southern Spain has varied from port to port, according to Spanish oil company CEPSA. A spokesperson explains: “Those ports where the bunker activity is mainly related to the economic activity in the port’s hinterland have been affected, but in other locations, like Gibraltar Strait, there has even been some growth.

CEPSA has four refineries in Spain: Algeciras, Huelva, Tenerife and Tarragona. Its bunker business is carried out by its fully-owned subsidiary CEPSA Marine Fuels (CMF), which is a physical supplier in all major Spanish ports. CMF operates a total of 11 barges. The company says that even where volumes have stayed up, the economic climate has had a marked effect on the competitive situation. A spokesperson says: “There has been quite a strong competition among the local players, which has driven margins to very low levels. It remains to be seen for how long these levels can be sustained.”

At the same time as having to cope with very low margins, suppliers in the western Mediterranean have had to adapt to changing demand patterns. The spokesperson notes: “We have seen demand for low-sulphur fuels increase due to the proximity of the North West European emissions control area (ECA), although not being suppliers in the ECA itself means that the percentage of low-sulphur fuels sales is lower than in those areas. The upcoming ECA in the USA in August 2012 could mean a little boost to the sales of LSFO.”

In order to comply with European regulations and to meet demand, CMF started offering 0.1% sulphur content MGO at all its ports by the beginning of December 2009, replacing MGO 0.2% sulphur.

In an expansion move CMF started bunkering operations at the beginning of this year at Huelva, aimed at the Strait of Gibraltar bunker market although the port is situated about 140 miles west of Gibraltar. The company is using the facilities of terminal operator Decal and has deployed the bunker tanker Spabunker 60 which can carry 2,400 tonnes of fuel oil and 680 tonnes of MGO. Ships can on occasion also be bunkered alongside the terminal while smaller deliveries will continue to be supplied by truck.

Explaining the move, the company said: ‘’CMF is now ready to offer more flexibility, time-saving and better service in our bunkering at the port of Huelva, as well as in the Strait of Gibraltar.’’

New terminal at Algeciras

The Port of Algeciras Bay is Spain’s largest port with container throughput in 2009 at 3.04 million teu. Last year, bunker volumes at Algeciras totalled 2.52 million tonnes, a 5.4% increase on 2008, despite the economic downturn and a drop off in container traffic last year. There are currently five bunker barges operating within the port waters.

This year it appears the volumes may be falling away slightly, with first quarter reportedly down 14% compared to the same period in 2009. In the longer term, volumes should recover and increase as the Port of Algeciras Bay Authority (PABA), which manages the adjacent ports of Algeciras, La Línea de la Concepción and Tarifa, is strongly committed to expansion and in particular developing new facilities on Isla Verde Exterior and Campamento will together provide more than 200 hectares of new port area.

A PABA spokesperson said: “One of the main challenges facing the Port of Algeciras Bay is the construction and commissioning of the main development taken on board in our history: Isla Verde Exterior. Having completed the first two phases of work in record time, the third phase is scheduled for completion by the end of 2010.”

Completion of the project will open the way for at least one additional bunker operator to make physical supplies in Algeciras, in addition to Cepsa and Repsol, which currently account for two-thirds and one third of the market respectively. Netherlands-based global liquid terminal and storage giant Vopak has just taken the majority interest in Alpetrol, the company which is developing the Isla Verde Exterior Liquid Bulk Terminal. In April, PABA’s Council approved the transfer of all shares of Novaro Invest SA, which had owned 70% of Alpetrol, to Algeciras Vopak BV. The remainder of the shares are held by the large Spanish-based oil trader Vilma Oil, which is also a physical bunker supplier in Ceuta.

The Isla Verde Exterior terminal is expected to offer about 400,000 cu m of storage for clean and dirty products and the terminal will be at least partially used for bunkering, but no decisions on which companies will use the facility had been taken by late April.

Ceuta calls on the rise

Situated on the southern shores of the Strait of Gibraltar, the Spanish territory is also a major player in the bunker scene at the western entrance to the Mediterranean. Ceuta has tended to be used by smaller vessels. Reflecting this, the average delivery in Gibraltar is between 700 and 750 tonnes while in Ceuta the average for the first quarter of 2010 was about 450 tonnes.

In 2009 there were 4,329 bunker calls, up from 3,684 in 2008. Cepsa is the largest supplier in the port, but the increase in ship calls is to a significant extent the result of the entry of Spanish-based major oil trader Vilma Oil and its move into the market as a physical supplier.

Cepsa operates from the Ducar II Terminal, connected to Poniente Wharf, while Vilma Oil operates from Ducar I terminal, connected to Levante Wharf. The latter initially rented about half of the Ducar Terminal, in 2006, mainly for use as storage connected with trading activities. Since then it has expanded its operation and now runs the whole terminal.

In 2007 Vilma Oil started supplying MGO from the terminal. In late 2008 and early 2009 it started phasing in sales of fuel. Supplying at first only high (IMO compliant) sulphur 380 cSt and 180 cSt bunkers, since the second half of last year the company has also sold 0.1% sulphur gas oil and from April it has supplied 1.0% 380 cSt.

In December last year Vilma chartered a 3,684 cu m capacity barge to deliver to vessels at the anchorage. Prior to that, Ceuta had not had a supplying barge since October 2007. Taking stems at the anchorage is attractive to larger vessels of over 4,500 gt, as they do not need to enter port and take bunkers ex-wharf, so putting up costs.

On the competitive situation, a Vilma Oil spokesperson said: “It is very tight between the three Gib Strait ports and margins are well down on 2008 and 2009. Some stems are being fixed at unbelievable rates – to keep volumes up. Vilma Oil is not following suit.”